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70% of consumers would share more data if there was a perceived benefit, with greater online security and convenience at the top of the list

04 February 2019 Experian

New Experian research examines key factors important for gaining consumer trust and confidence

Digital commerce has changed the way consumers interact with businesses, moving from face-to-face transactions to anonymous relationships built on trust. Difficult to achieve and earned over time, trusted online relationships are based on businesses providing a secure environment and a great customer experience. Released today, Experian’s Global Identity and Fraud Report found that 74 percent of consumers see security as the most important element of their online experience, followed by convenience.

While businesses often have invested in one at the expense of the other, consumers across the globe expect both. So much so that 70 percent of them are willing to share more personal data with the organisations they interact with online, particularly when they see a benefit such as greater online security and convenience.

“Security and convenience are the bedrocks of a dynamic digital marketplace that effectively manages risk and delivers a seamless experience,” said Steve Pulley, Experian’s executive vice president and general manager of Global Identity & Fraud Solutions. “The availability of information consumers share with businesses makes this possible, but it’s the same information that puts them at a greater risk for fraud, making trust more important than ever.”

Findings from the study also reveal that consumers and business leaders agree that security methods enabled by new technologies and advanced authentication solutions instill online trust. In fact, consumer confidence grew from 43 percent to 74 percent when physical biometrics was used to protect their accounts. Businesses also are beginning to embrace the changing technology. Half of organisations globally reported an increase in their fraud management budget over the past 12 months.

“With the digital marketplace in South Africa expanding, the risk of fraud remains a constant and growing threat in the digital landscape. While it is encouraging to see the industry responding to this as best as possible, we believe there is still a serious need for consumer education that involves helping consumers to feel more in control of their personal data,” says Mark Wells, Chief Customer Officer at Experian South Africa. He adds: “Through our fraud solutions, we remain committed to protecting consumers, and making significant investments to safeguard consumer data against a constant and evolving threat posed by today’s increasingly sophisticated criminals.”

The report went on to discuss how many businesses are proactively sharing with customers how they use their personal information. The report found that nearly 80 percent of consumers say the more transparent a business is about the use of their information, the greater trust they have in that business. Fifty-six percent of businesses plan to invest more in transparency-inspired programs such as educating consumers, communicating terms more concisely and helping consumers feel in control of their personal data.

To develop the study, Experian® interviewed more than 10,000 consumers and more than 1,000 businesses across 21 countries around the world. Additional findings from the third annual fraud report include:

• 55 percent of businesses reported an increase in fraud-related losses over the past 12 months, particularly account opening and account takeover attacks.
• 60 percent of consumers globally are aware of the risks involved with providing their personal information to banks and retailers online.
• 90 percent of consumers are aware that businesses are collecting, storing and using their personal information.
• Banks and insurance companies are the organisations trusted most by consumers across most regions. Online retail sites and social media sites trail considerably on trust.
• Nearly nine out of 10 consumers report conducting personal banking as their top online activity.
• Passwords, PIN codes and security questions remain the authentication methods most widely used by businesses, followed by document verification, physical biometrics and CAPTCHA.

The Global Identity and Fraud Report also shows how different regions across the globe view and manage fraud:

• Concern for fraud and increased fraud losses are highest among businesses in the United States.
• The greatest number of consumers who already have experienced a fraudulent event online are in the U.S., with the lowest number of consumers from Europe, Middle East and Africa.
• The U.S. and the UK lead with the biggest increase in fraud management budgets over the past 12 months, with three-quarters of businesses budgeting more for fraud management this year.
• Latin America is a top user of advanced authentication technology where CAPTCHA, physical biometrics and customer identification programs make up the top three authentication methods. This differs for businesses in other regions, which rely more heavily on passwords, PIN codes and security questions.
• Physical biometrics seems to have the largest positive impact on trust, particularly in Colombia and the U.S.
• The U.S. has invested the most when it comes to transparency initiatives in the past 12 months, and Colombia has the highest intent to invest more in the next six months.

The full Global Identity and Fraud Report can be downloaded here:  http://www.experian.com/decision-analytics/global-fraud-report-2018.html.

Experian’s identity and fraud business comprises more than 300 fraud experts around the world working to protect people’s identities and fight fraud for businesses across multiple sectors, including financial services, telecommunications, retail/e commerce, insurance, government and healthcare.

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