Half of large firms are focused on digital identity and authentication, according to new research.
In The Next Wave: The Business Adoption Of Digital Fraud Solutions Playbook from PYMNTS and Equifax, researchers examined the priorities and concerns of businesses around digital identity. These include auto dealers, banks and credit unions to P2P alt-credit lenders.
Company size and age are a factor in how businesses rate the urgency of digital identity solutions in 2021. Per the research, “Larger firms represent the highest percentage of respondents [reporting] that digital processes for authentication and verification are important,” with 49 percent of companies doing more than $500 million in annual revenue calling digital identity authentication “more” or “much more” important now than it was in 2020.
Smaller firms (less than $50 million in annual revenue) “represent 60 percent of businesses that believe that using digital processes is ‘less’ or ‘much less’ important.”
Uses of Authentication Multiplying
There are several reasons for the new immediacy, says the report.
It notes: “P2P lenders that plan to invest in digital authentication solutions more commonly cite consumers’ lack of adequate access to technology as a key authentication challenge prompting them to invest in innovative solutions (62 percent). Auto dealers that plan to invest cite delays with existing digital processes as a key factor (55 percent) and banks and credit unions cite consumers’ lack of skill in navigating their current processes as a reason for making new investments (58 percent).”
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A common theme among respondents in all sectors is onboarding new clients for growth.
“More than two-thirds of firms consider increasing their customer bases to be a ‘very’ or ‘extremely’ important reason for adopting or improving digital processes for consumer identification. This is closely followed by firms’ interest in improving their rate of complete transactions (68 percent) and boosting trust among customers (67 percent).”
Cost Reduction, Customer Acquisition Driving Adoption
Other reasons for doubling down on digital identity also surfaced in the new research, with a desire to streamline and be more cost-efficient making the cut as major motivators.
“Forty-eight percent of firms that plan to invest in digital solutions that help with authentication are interested in reducing costs to adopt or improve digital processes for consumer identification,” it says.
“PYMNTS’ research shows that more than 40 percent of surveyed firms plan to invest in digital authentication solutions to protect themselves and their customers from growing security threats,” per the study. “These firms also see investments in such solutions as key to boosting their customer bases. Investing in innovative authentication and verification solutions is going to be vital to improving relationships with customers and gaining their trust in the long term.”