Digital transformation is changing the world and enabling the digital economy with frictionless ID verification is going to be crucial in future.
We know that traditional legacy authentication is going to be insufficient in the digital economy, being slow, static, intrusive and expensive. Passwords are being written off and they are becoming a problem for the consumer, so much so, that they are becoming a barrier to product and service use.
Due to a combination of sensors, encryption, device verification and seasoned data-linking technology such as our Scalable Automated Linking Technology (SALT) from LexisNexis Risk Solutions, authentication is taking on some new (and exciting) forms.
The future is going to require more digital solutions that are scaleable, dynamic and anonymous. And increasingly with global payments that are not just relevant to the insurance world, it is necessary to think about global privacy issues and trans-national regulation such as GDPR when considering every single permutation of a digital transaction with different legal jurisdiction issues.
It has been estimated that over 3 billion people already use the Internet every day. Every single one of these people is bringing a set of different digital personas when they go online, which might be captured in the devices they access, different email accounts they may be logged into, unique IP addresses, geographic locations, personal and business personas, which all become melded together to represent a person’s unique ID.
Customer experience is the new battlefield
Just let us consider for a moment, how important seamless digital access to services is going to be in the future, looking at the world three to five years from now. Nine in ten companies in a recent Gartner survey agreed that customer experience is becoming the primary basis for competition.
The IoT enabled insurance market is forecast to be valued at over $42 billion globally by 2022, including risk services related to devices in the home, auto and commercial buildings.
Smart home services are estimated to worth $121 billion by 2020. Infrastructure and services for smart cities are estimated at $750 billion by 2020. The IoT retail market is estimated at $35 billion by 2020, which will include things like the automated supply chain and new revenues from home hubs, home security and comfort products.
All of these connected platforms will be generating data at a rate never seen before, with critical issues around data security and the need to create new customer user journeys.
The Internet of Things is beginning to have a major impact on homes, cities, utilities, retailers, insurers and connectivity. In fact it is transforming the operating model and the security challenges are different in all of these digital worlds.
The end-customer is a lot more involved in the design of the digital product or service now, with things like dynamic customisation and integrated access becoming key words for all financial service organisations. Every business now is a digital business.
For insurance, looking at the challenges around the world in the markets where we operate, our personal identifier LexID® is being introduced as a data set ingredient into more products, particularly in the UK and it has potential to perform the same anti-fraud role in India. It is also a part of the data infrastructure necessary to serve application form data pre-fill, which is already established in the US and loved by consumers.
LexID® reduces call time and the follow-up actions necessary with consumers, providing a much better experience for them over mobile, whilst also allowing insurers to assist more customers with the same resources.
In insurance the sharing of data in the fraud context is well established but there is increasing sophistication of regulation with GDPR coming in 2018 that will affect Europe with a wider impact on the micro-processes for personal data across borders around the world. Insurers are having to look in even greater detail at when – and where – data is being used for fraud and verification purposes, and when it is being seen through the product lens.
The key for the consumer is trust and giving them the perception of safety which they are demanding with any service they use. They are looking for an elegant user experience.
But at the same time they don’t want to be overwhelmed with options and demands for second-tier passwords. Recently in authentication the trend has been away from using the mobile phone as just a browser, towards its use as more of an authentication device. Not all customers are the same of course. Digital fraud is evolving and it requires a lot of energy to keep up with changing threats like malware in session, change of details fraud and other forms of ID theft.
At the recent Digital Identity Summit organised by ThreatMetrix there was consensus that demand is rising for risk analytics in ID verification. In general there is a movement towards a person’s behaviour online and their digital footprint (looking across devices, time-on-page interactions and other behavioural analytics) being used, as well as matching from various data sources, to be able to precisely ID the consumer in a non-invasive manner.
“At the core is the concept that the individual will control their ID structure,” said Chris Skinner, author, former strategist with Unisys and NCR and CEO of The Finanser.
“There is a multitude of signals. The age of the ‘killer attribute’ has gone,” said Andreas Baumhof, CTO and Senior VP Engineering at ThreatMetrix. “Big data has done a lot recently, so that we can handle large quantities of data in real time….Data quality is key.”
“Fraud today is a balancing act, relating high or low fraud to conversion,” said Joel Van Arsdale, Managing Director of Accenture.
“Everyone is waiting for the digital wallet but in fact there is no one single solution….The relationship between the consumer and their service provider today is much more complex than they think.”
He added that whilst traditional e-commerce and card payments are slowing, digital and ‘in-app’ commerce is growing at five times the traditional rate.
With the work we do at LexisNexis Risk Solutions, in insurance and other financial services, in ID management services, tracing and investigation, in our work for governments and law enforcement as well as our big data supercomputing arm HPCC Systems we are committed to helping create this new world of seamless identity verification.
Follow the link to the LexisNexis Risk Solutions website to find out more about how we support insurers.
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