Old and inefficient identity measures lead to lost revenue for retailers
The study conducted for Experian by the International Fraud Prevention Research Centre found that 44% of UK shoppers have abandoned at least one online shopping transaction in the last year due to frustration with the length and complexity of certain older forms of identity verification.
In addition, one in five of these abandoned transactions were not taken elsewhere as individuals cancelled their shopping attempt altogether, resulting in £214 million worth of net lost revenue for UK retailers.
Older forms of online identity verification such as standalone systems drawing on single sources of information to corroborate identity information are unable to validate as many individuals electronically as modern services. As a result, genuine customers might be forced to call a contact centre, submit physical documents through the post or visit the store or branch to confirm identity.
Nick Mothershaw, UK director of identity & fraud at Experian, explained:
"The UK’s lost billions from inefficient online identity and security measures is a price that doesn’t have to be paid given that technology now enables incredibly robust identity checks to be undertaken almost instantaneously.
"Older forms of identity verification – which draw on limited information or out-of-date data, cannot instantly validate as many genuine customers, and don’t provide extra assurance from interactive questioning or the checking of previous identity fraud intelligence – require organisations using them to prioritise security or customer convenience.
"Those using less efficient identity checks can benefit significantly by upgrading to newer tools, which enable improvements in security levels and faster, less onerous checks."
Professor Paul Barnes, director of the International Fraud Prevention Research Centre, added: "Depending on the reason for the identity verification check, our tolerance during a transaction varies greatly – and can be as short as a 60 second window. With millions potentially being lost from the key industries in the UK, it is vital that this issue is addressed as soon as possible."
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