Will current trends in biometric identity proofing and authentication reverse or accelerate? Where should businesses focus their investment dollars to get the most benefit, and which key technology themes are likely to drive the conversation? Here are some thoughts shared by Conor White, President of the Americas at Daon.
1. Customers will demand a digital ID
In 2022, the trend toward remote, digital services will continue. Every customer will become a digital customer, which means every company needs a digital identity strategy.
The most successful companies will embrace an operating model that places trusted digital identity at the center of their customer experience. In such a model, chain of trust begins with the initial verification of a digital customer’s identity—which anchors the trust relationship from that point forward. Subsequently, only biometric authentication that’s tethered to the initial verification event can ensure this anchor stays attached.
For many, this change has already occurred, as evidenced by the growing prevalence of remote customer onboarding for an expanding number of demographic segments and vertical markets.
In the banking industry, the desire to initiate new banking relationships without visiting a physical branch—or, in some cases, to bank with all-digital institutions that forego branches entirely—was apparent long before COVID, but mostly attributed to the millennial generation.
Now, it’s everyone. Full stop.
According to J.D. Power’s annual survey of U.S. retail banking, the percentage of new accounts being opened through a bank’s website or mobile app rose from 22 percent in 2019 to 31 percent in 2020. And by 2021, a full 41 percent of U.S. retail banking customers described themselves as “digital only.”
But this isn’t just in banking. In other verticals—take healthcare for example—remote onboarding of patients was barely in its infancy pre-pandemic, but the sudden necessity of delivering high-volume digital health services (or “telehealth” services) led to a frantic adoption of makeshift digital identity processes that, to be candid, weren’t always so robust, convenient, or secure.
We expect several things about this to change in 2022. First, healthcare payers and providers are likely to rethink many of their existing digital identity processes and replace One Time Passwords (OTPs) and other legacy factors with biometric-based patient onboarding and ongoing authentication, which is both exponentially more convenient and more secure.
Second, consumers will acclimate to the benefits of these remote services and will begin to demand the same experience in other aspects of their lives — education, for example, and even government. Already, we’re seeing an uptick in learning institutions using our biometric and digital identity capabilities to ensure that students taking courses and completing exams are, in fact, the correct ones.
In addition, we anticipate the pioneers in this space — many of whom are banks and other financial services providers — will take the next leap forward in creating truly frictionless digital identity experiences for their customers. Recent studies suggest that as many as 40 percent of today’s banking customers are abandoning the digital onboarding process because it’s too difficult, confusing, or time-consuming. Businesses that invest today in a superior customer onboarding experience — with greater data transparency and rules engine customization to boot — will grow their market share in 2022.
Key Point: Make things easy for your new digital customers. Within the next year, over half of all bank customers will do business exclusively through digital channels. For those that still visit a bank branch, it will be fewer than 5 times per year.
2. Digital identity gets smart
In its 2021 report on Identity Proofing trends, Gartner emphasizes the increasingly “close coupling” of identity proofing and authentication. Sure enough, more and more businesses are learning how to leverage the biometric data obtained during the digital onboarding process for use in subsequent login, step-up authentication, and account recovery use cases. The idea isn’t new; Gartner has been pitching the term “Identity Corroboration” for years now to describe the growing convergence of these identity solution categories. What’s new is that in 2022, businesses will begin to view this marriage of identity proofing and authentication as a building block for creating an even more profound transformation.
In 2022, the maturity path for digital identity will begin with strong authentication and digital onboarding, proceed to continuity and convergence of those discrete identity systems and functions, and culminate with true identity “intelligence,” through which companies can make well-informed, person-level optimizations for each and every customer.
This model stands in stark contrast to traditional Orchestration, in which an orchestration “shim” sits atop a tangle of disjointed identity systems—an approach that treats the symptoms of identity failure without curing the underlying disease.
Identity intelligence, on the other hand, creates an environment wherein information flows outward from a central data store, creating a single view of the customer. And without any gaps between systems to exploit, fraudsters will have a hard time running their typical attack playbook.
Key Point: AI/ML document recognition and fraud detection techniques are already superior to humans—and the intelligence divide is only growing. In 2022, make sure your digital strategy takes full advantage of the power of machine learning and unified Identity Intelligence.
3. Overwhelmed contact centers lean into voice biometrics, enhanced IVR
Contact center agents took the brunt of our social displacement in the early days of the pandemic; depending on whom you ask, the increase in contact center traffic rose as high as 300 percent, 600 percent, or more. Today, while no longer at their peak, call volumes have remained at elevated levels, and “The Great Resignation” has only exacerbated an agent attrition rate that averages 32.6 percent during even a normal year.
So how will contact centers handle more calls with fewer agents? One way is to reduce the time it takes to handle each call. And streamlining the authentication of the caller’s identity, which takes on average 11 percent of the total call time, is an easy place to start. One of our banking customers recently shared that biometric authentication has saved them on average 45 seconds per call, and it’s delivered the double whammy of increasing customer satisfaction while reducing fraud.
In 2022, expect more and more contact center operators to move away from knowledge-based authentication (KBA), which is time-consuming, frustrating for the user, and not even very secure. (In fact, Gartner estimates that KBA accepts up to 60 percent of criminals while rejecting up to 30 percent of legitimate customers.) Taking its place will be biometric authentication—particularly passive voice biometrics, which can deliver an essentially frictionless experience for callers using any phone, anywhere.
A second way to process more calls with fewer agents is to contain more calls within an Interactive Voice Response (IVR) platform, and biometric authentication is a simple way to add strong security to an IVR system without much additional friction. With the added security in place, businesses will feel confident enough to authorize more customer transactions without the involvement of human agents, which (ironically) is the biggest security vulnerability most contact centers have—thanks to opportunistic fraudsters and social engineering techniques.
Key Point: Response times go up, customer engagement goes up, customer satisfaction goes up, staff costs go down, fraud goes down. It’s a no-brainer!
4. Mask wearing endures, single-mode biometrics fizzle
There’s little doubt the not-so-novel coronavirus, mother of all social disruptions, will continue its way through the Greek alphabet in 2022 and perhaps well beyond, though most scientists also predict a transition point for COVID, from pandemic to endemic, that could signal a return to more traditional consumer tendencies. This transition may not happen in 2022, but we should begin preparing for it by assessing which COVID-induced customer behaviors are transitory and which are here to stay.
Mask wearing, especially for more vulnerable populations and during winter months, is likely to stick around, which means that facial biometric authentication may never be quite as convenient as it once was in public spaces. And while face recognition technology can adapt to these circumstances to a degree, the larger takeaway perhaps is that single-mode biometrics will continue to pose environmental challenges, and the need for a multi-factor biometric authentication platform that combines and orchestrates face, voice, fingerprint, behavioral, and other biometric and non-biometric modes will only grow in 2022.
Indeed, some users may never be fully comfortable removing their masks, even temporarily in certain settings, which necessitates an alternative authentication path for this subset of users. Fingerprint biometrics, another popular authentication factor, poses a similar problems for users wearing gloves, and voice biometrics can be difficult to use in noisy public spaces.
Key Point: Offering users a choice of biometric factors—undergirded by an intelligent platform that can securely accommodate multiple, risk-based authentication paths—is the surest way to deliver a safe and convenient authentication experience for every user in any environment.
5. Mobile tech tames COVID complexity in new ways
Digital services like remote customer onboarding are more essential than ever, but not every physical interaction can be digitized. In areas like travel, leisure, and hospitality, there’s a growing need for digital identity solutions to augment the health, safety, and efficiency of in-person interactions, and this trend will only accelerate in 2022 as the reopening gains strength.
Just over a year ago, Daon created VeriFLY for just this purpose, and it’s since become one of the world’s most widely adopted digital health wallet for COVID-related identity credentials, with millions of users all over the world.
Digital health passes are designed to make sense of all the changing, byzantine rules and requirements for safely navigating the world, so your customers don’t have to. The more complexity in the system, the more value solutions like VeriFLY provide, and with more vaccine boosters, variant-specific and multi-virus vaccines, employer mandates, and travel restrictions coming down the pike, it’s a safe bet 2022 delivers even more complexity than its predecessors.
Key Point: Already, major airlines like American Airlines and British Airways, cruise lines like Viking, and hospitality leaders like Hyatt have used this technology to give their customers safer, faster in-person experiences. But we expect the number of new use cases for biometric health identity solutions to skyrocket in 2022, in areas like peer-to-peer rentals, rideshares, sports, entertainment, classrooms and campuses, and office buildings.
About the author
Conor White is President of the Americas at Daon.
DISCLAIMER: Biometric Update’s Industry Insights are submitted content. The views expressed in this post are that of the author, and don’t necessarily reflect the views of Biometric Update.