Today’s digital world is characterized not only by volumes of data and online activity, but also by the ways that consumers are interacting and transacting through online channels. Digital experiences have transitioned from surfing and reading content to financial transactions, purchases, and movement of medical data. The sensitive nature of these online activities has brought with it an increased need to focus on consumer authentication and identity security. The pandemic has accelerated consumer’s push into more sensitive digital transactions. Recent KPMG research found 69% of consumers are shopping more online and 44% are using different technologies since the start of COVID-191. This makes it increasingly difficult, as well as important, for companies to invest in ways to secure consumer’s online interactions. Unfortunately, two key challenges exist; (1) consumers are largely unhappy with current authentication procedures and (2) authentication in most companies is a mess, generating operational complexity and making it very difficult to provide good customer experiences.
Authentication and Customer Experience
Consumers trust companies are handling their personal data securely and enacting measures to combat fraudulent transactions/use of their information. Simultaneously, most consumers expect not only a safe but a seamless authentication experience. Unfortunately, most find the current measures to be cumbersome. Consumers report being dissatisfied with even legacy methods of authentication such as passwords. Over 90% of consumers are more inclined to biometric authentication than password authentication2. Even though multi-factor authentication has been well-established to be one of the most secure forms of authentication for customers, most are not willing to make the extra effort; 74% of companies polled in a survey by SecureAuth reported customer complaints when applying 2FA (2 factor authentication)3. Authentication is essential and clearly has tremendous implications on the customer’s experience and trust. Done poorly, authentication can negatively impact each of the six key customer experience pillars (Illustration 1). This leaves companies walking a fine line between effectively securing each customer’s interactions while also providing a seamless experience.
Authentication and Company Operations
Challenging most companies’ ability to walk this fine line is, the current state of operational complexity, disconnected procedures, and compliance issues associated with authentication. Disparate data sources, massive volumes of data, different privacy requirements based on transaction type, different authentication platforms, and poor communication are at the heart of most operational issues. Further, challenges controlling data movement and extreme concerns about data privacy breeches led to more stringent authentication measures increasing operational complexity. On top of operational complexity, digital experiences bring compliance and fraud related risks. A growing fear of and impact from data breaches, (Solar Winds, Colonial Pipeline, JBS Meatpacking) to increasing data and privacy related regulations (Washington, California, and Virginia) has left companies and customers hyper-sensitive to data privacy/protection. Ninety percent of consumers say they want more control of their data, seventy percent are willing to take action to protect their privacy and twenty nine percent have already acted against companies or providers for their data policies and data-sharing practices4. Companies have traditionally approached authentication as an IT issue, rather than a component of customer experience. Impacts on customer experience don’t factor into technology decisions producing a variety of authentication technology and customer experiences. Those responsible for customer experience are often not even fully aware of all the interactions which require authentication, the technologies used, or the specific impacts on the customer experience. This coupled with the growth of digital transactions and customer data has left many companies struggling to just keep current with authentication requirements let alone address their impact on customer experience.
Operational complexity and customer experience variability is only accelerated when multiple authentication platforms are used throughout the organization. One authentication platform which promotes a single consumer identity can have lasting benefits on operational efficiency and customer experience. Authentication issues/impacts are complicated by poor communication to customers. For the customer, authentication is often complex and confusing. Few companies provide formal, written explanations of their authentication processes or associated rationale to employees let alone customers. Authentication can be a straightforward process with minimal effort and pain points, but for that to happen the company must offer detailed communication on steps it is taking to secure personal customer data and protect users.
Authentication has been largely viewed as an IT issue, however, as the nature of data and online transactions become more personal to the consumer, the marketer’s perspective of authentication becomes pivotal. Marketing must ensure the voice of the customer is part of the decision-making process for authentication and help shape digital transactions which are simple, secure, and personalized. To participate in authentication decisions, marketing must demonstrate its impact on consumer experience, satisfaction, and retention. This will require Marketing gain first-person insight into authentication processes. To accurately understand the current state, marketers will need to1 identify and document all the consumer/customer interactions which require authentication; mapping each decision and implication,2 determine which aspect of the six CX pillars are impacted at each point of the journey3 understand what happens if authentication fails, and gauge the consumer/customer’s recourse; 4 determine the consumer perspective on the authentication process at each point/interaction and its effect on overall customer satisfaction. Because authentication is an ever-changing issue, and there is so much to unpack, in the next installment we will start taking a deeper dive into this issue. We will examine how authentication can negatively impact aspects of customer experience and key questions marketers should ask to ascertain its impact on customers and on the company.
- Ian Benson
Director Advisory, Customer Solutions, KPMG US
- Neil Hunt
Associate Advisory, Customer Solutions, KPMG US
Illustration 1: How authentication can negatively impact customer experience
- Organizations fail to act on inconsistencies and pain points of authentication processes
- Organizations fail to clearly communicate data security, authentication process and rationale
- Fails to accurately use customer data to inform authentication
- Fail to tailor authentication processes based on interaction channel
Time and Effort
- Long and complex login and authentication processes (>30 seconds)
- Number of authentication factors exceed the level of security/privacy needed for a specific transaction
- Failure to provide a frictionless, secure, and simple authentication
- Need to authenticate identity more than once during a single session
- Failure to provide knowledgeable professionals providing resolution
- Failure to provide efficient & effective resolution to authentication challenges
- Customers do not trust that data and personal information is protected
- Risks of fraud or non-compliance for company and consumer
- Source: KPMG International “Me, My Life, My Wallet” (January 2021)
- Source: EngagementBureau, Mastercard Report (January 2019)
- Source: DuoLabs, State of Auth Report (December 9th 2019)
- Source: eMarketer, Jeremy Goldman (May 24th 2021)