UK Banks Face Consumer Frustration Over Digital Identity Management

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UK banks are facing consumer frustration over customer identity management, according to a new study from global analytics software provider FICO.

The survey of 172 banks across eight countries – conducted by independent research firm OMDIA – discovered that consistency of identity validation across digital channels is a challenge for 54% of UK banks.

For example, whilst 72% of UK banks use digital methods to capture identity for personal bank accounts, only 36% said they capture customer identities and verify them in the same channel, the study claimed. Such lack of integration – which often forces users to download further apps or scan and email documents to verify details – leaves clients much more likely to abandon an application and highlights that current identity verification methods are not fit for purpose in the digital age, FICO said.

Banks in the UK also noted challenges around authentication of existing customers, including complying with legislation, with a lack of up-to-date customer information such as mobile numbers noted as further inhibiting streamlined customer and payment verification.

“Historically, identity solutions were developed for face-to-face interactions and have since been adapted to the needs of new channels and products,” explained Sarah Rutherford, senior director of identity fraud marketing at FICO. “As digital interaction is accelerated by the impact of COVID-19, it exposes the weaknesses inherent in using identity verification processes that were not intended for digital channels.”

Banks therefore need to move fast to work out how identity fits into their digital on boarding and authentication strategies, Rutherford added.

“The fragmented approach is impacting the customer experience. The benefits of moving to a single identity infrastructure across all channels and product lines should be assessed as a matter of priority. This approach reduces unnecessary friction and confusion for customers, avoids multiple copies of documents being held across the institution and facilitates faster on-boarding of cross-sell opportunities.”

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