How identity technology will open ecommerce up to the next billion?
While many take identity as a given, there are currently over a billion people across the globe who cannot prove who they are. That is a major problem in today’s increasingly digital society and economy where a recognisable form of identity is vital for both financial inclusion and social mobility.
As globalisation, technology and political environments continue to evolve, and as disruption spreads uncertainty across nearly every industry (retail and financial services in particular), reaching the ‘no identity billion’ is crucial, both socially and economically.
Our digital identity has become intrinsic to daily life – our phone numbers and email addresses have become as vital to personal identity as our DNA. The world’s data network is expanding, with identities continually being registered, stored and verified across the globe.
However, as the web of data expands, so do disparities. With each step away from traditional documentation methods, the gap between the identity ‘haves’ and the ‘have nots’ will continue to grow. As we increasingly foster emerging technologies, identity will begin to alter the rules of access to the digital economy in developed and developing markets.
How can retailers instead use technology to empower and enforce identity, rather than widening the gap, and reach the ‘no identity billion’?
Optimising user experience with biometrics
Technology today is becoming more and more personal. Smartphones and wearables are now seen as vital, everyday tools, while advances in biometrics – both in terms of availability and reliability – are moving us one step closer to being able to verify the identity of almost anyone, anywhere, any time.
Businesses that are currently driving ahead in the digital economy are those who are expanding their identity methods beyond traditional means of verification. Numerous digital identity tools now exist – ranging from global datasets, APIs and machine learning, to smartphones equipped with microphones, cameras, and fingerprint scanners – and by adopting them, retailers can transform their customers’ user experience (UX) journeys.
The need for frictionless ecommerce experiences
As engagement with the world of e-commerce continues to increase, consumers expect optimised services. For example, a frictionless experience including localised content and cheap, quick delivery has become a normal standard.
With identity data varying from region to region, this can be challenging for businesses. Take addresses for example – formats can be very different depending on the country, leading to discrepancies in global data. And for someone in the UK looking to mail something to China, where addresses are formatted in a different order, discrepancies in how data is entered and understood in retail and mail systems may cause confusion and prevent parcels from reaching their end destination.
Without a clear understanding of cross-border trading, or even access to this data in the first place, businesses will struggle to get ahead in the competitive global market.
Compounding these localisation challenges, organisations also have to think about how they’re verifying globally. It’s not enough to rely on one source of data – instead, there’s a real need to connect multiple points across datasets for certainty as to what identities are real and customers are who they claim to be.
As such, global datasets are now developing new connected layers thanks to identity intelligence, which is allowing companies to verify multiple data sets in order to make a single, verifiable and cross-checked decision.
By investing in identity technology, businesses are opening up markets and boosting the possibility of a fully borderless commerce experience. For example, TransferWise, the leading online money transfer service, uses identity technology to power its borderless service. By verifying users through trusted electronic data sources, TransferWise can onboard users across the globe in a matter of moments, ensuring happy customers and smooth business operations. As this prospect drives forward, identity technology is leading the way to a new form of international commerce.
Optimising trust in the digital value exchange
It’s no surprise that the constant changes and progression in the digital identity sphere can be overwhelming for consumers. As technology evolves, consumers continually have to navigate the immense value exchange landscape that powers the eCommerce industry today – namely that between security and convenience. The ideal situation in this consumer-data relationship is one of frictionless trust.
Frictionless trust involves providing easy UX while ensuring optimal security for both consumers and businesses when it comes to data privacy and fraud. By layering data, we can start to look at not just knowing that there is an identity, but trusting it too.
In painting a picture of what a verified customer looks like we might use the following layers: ‘does this name, address and DOB exist?’. ‘Does it belong to this mobile device, laptop, tablet?’ ‘Have these devices been associated with bad or good activity?’
And the good thing about these new data sets is that they are passive, so customers don’t have to manually input additional data, or move to an offline journey, ruining their experience.
Biometrics, behavioural insights, and authentication
Biometrics has been the buzzword in digital identity for a few years now, but there are other, equally valuable technologies driving the generation of these new types of data. Behavioural insights can identify a consumer by the way they hold and interact with their phone, something unique to each individual, and very hard to fake.
Authentication is also key, and businesses should ensure that they have multiple types in place to ensure trust and security for consumers. There are several types that can be implemented, depending on business requirements: active authentication can involve either sending a one time passcode via text message, or using biometrics, in which consumers have to send a picture or video of their face. On the other hand, passive authentication involves the silent authentication of devices: detecting changes in mobile devices such as SIM or network swap, as well as using emerging technologies such as behavioural biometrics.
However, for both businesses and consumers, a lack of real understanding of digital value exchange has undermined trust. Organisations need to strike a balance when developing and delivering a frictionless and safe experience for customers. Ultimately, one thing remains as clear and consistent as ever: customer expectations.
Customers are not willing to forgo seamless and convenient UX, however If the commerce experience is simple, transparent and secure, they will be willing to share their data with reliable retailers and businesses.
Ensuring secure identity is key
Unfortunately, the internet wasn’t built with identity in mind, and so trading securely with unknown people and organisations can be difficult. It’s never been more vital to global commerce for businesses to ensure safe identification and verification of their customers.
In order for the global economy to progress, and for commerce to fully transition into a borderless, mobile-first position, organisations will need to be able to both reach and accurately identify all customers.
New identity approaches and technologies are paving the way for the establishment of ‘frictionless trust’ between businesses and consumers, however there is still a way to go.
If we are to reach the ‘no identity billion’, further developing and cementing trust around the digital value exchange will be the key next step towards true borderless commerce.
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