Insight

New privacy rules require new, innovative methods for companies

How to transform your customer authentication process and boost customer trust

The marketing world is about to undergo a massive shake up by the end of 2023 when the use of third-party cookies – the backbone of the digital advertising industry – will no longer be permitted (or at least significantly limited). As a result, your company is going to have to find innovative, new ways to gather the customer data essential to identifying customers and customer trends as well as devising strategies that encourage them to willingly turn over personal data to you.

Rather than viewing these new privacy rules as a negative, you can look at them as an opportunity to develop and/or enhance ways of collecting customer data in a manner that’s customer-centric, privacy-friendly and increases their trust in – and willingness to do business with – your company.

This article will show you how to transform your customer authentication process so that it strengthens the trusted relationship between you and your current and potential customers. This, in turn, will make them more willing to entrust you with the type of personal data you need to:

  1. Support your marketing campaigns and strategies
  2. Gain better insights into how they interact with your company digitally
  3. Determine the behavioral triggers that motivate their actions

Evolving privacy rules impact customer data gathering strategies

During the past two decades, customer data captured through third-party cookies was the lifeblood of digital advertising and many companies’ marketing plans. But a combination of factors, including consumers’ concerns with privacy and cybersecurity breaches and several laws that support consumer privacy protection, 1 have hastened the demise of using these third-party cookies. Instead, customers have been given the right to choose how, when, and where their data is collected and used.

As it turns out, the use of third-party cookies was not necessarily the most effective way to capture useful data about customers. According to a study performed by Gartner®, “The attribution accuracy of third-party cookies has often faltered with poor consumer identity match rates between 40 percent and 60 percent.” 2 So being forced to gather data first-hand from your customers – that is, replacing data information from third-party cookies and getting it right from the source, your customers – may end up being a good thing; you’ll end up with better, more accurate and useful data that can be used to boost your business. The challenge: getting your customers to willingly provide you with this data.

Gaining customer trust via customer authentication

Before willingly giving you their personal information, existing and potential customers will want assurances that their information will be kept safe, secure, private, and that they have a say in when it’s used. Companies that are successful in getting this message across and delivering on it will be rewarded with increased trust, loyalty - and ideally, revenue. 

Your customer authentication process - collecting information about customers or potential customers’ identities to verify that they are who they claim to be - can be the key to both developing and strengthening customer trust, improving the customer’s experiences, and gathering better, more accurate data. It’s a two-way street: Through authentication, you verify that only the users to whom you allow in can access your platform or website. Conversely, when customers authenticate themselves through your website or other platform, they’re allowing only you (or companies they’ve approved) to have access to their data. 

 

1. Simplify the authentication verification process 

While it’s imperative to maintain a secure identity verification process, many of them are unnecessarily convoluted. Assess your current approach to see how it can be made simpler, faster, and more efficient. For example, consider using time-saving tools like face and/or voice match authentication, or ways to scan “official” documents like passports to ensure that they have all the proper markings (e.g., watermarks).

Some organizations are exploring biometric technology such as facial and fingerprint authentication.These techniques can make it easy for customers to prove their identity quickly and securely and engender confidence in your process.

2. Foster CMO and CIO collaboration 

Customer authentication primarily has been seen as an information technology (IT) issue as IT typically is responsible for building the systems for identifying and authenticating new and returning customers. However, marketing needs to equally be involved with IT in this process. 

IT typically – and perhaps naturally – looks at the customer authentication process through a technology lens. What IT sees as sensible and logical security measures are all too often viewed by consumers as irritating roadblocks that discourage doing business with the company. IT wants to enable the organization and reduce redundancies but can’t do that if they are not connected in lockstep with the front office. If marketing and the rest of the front office keeps offering customers new experiences, it only makes IT’s authentication process more difficult. 

As noted in a recent study by KPMG, “70% of all CMOs lack a multiyear strategic plan for Marketing Technology, making is difficult for technology teams to align with and keep track of Marketing Technology.” By aligning the IT and Front Office offerings, both departments can solve their pain points and collectively align on a multiyear strategic plan for success. As a result, marketing, and other front office departments need to work with IT to develop an authentication process that is both secure and consumer friendly. 

Breaking down siloes between IT and the other departments may require a high degree of cooperation and orchestration across the company. Unfortunately, only 23 percent of organizations excel in this relationship, according to a study by KPMG and the CMO Council. So it’s critical that CMOs and CIOs work together to get the customer authentication process right. Companies that do this will be seen as the most trusted to work with.

3. Acknowledge and alleviate customer trust concerns

Due to many highly publicized cyber-security breaches, customer trust has been shaken, introducing uncertainty around customer data practices and laws. This is one of the primary reasons regulators at home and abroad have enacted rules regarding data privacy and protection. It’s critical to make customers feel safe and secure and ensure that you’re safeguarding their personal and confidential information from cybercriminals. At the same time, you must balance the need to protect customer data with the corresponding need to offer a simple and easy process for consumers to do business with you in a digital world.

By focusing on a strong customer authentication process that’s developed with these customer trust issues top of mind, companies can still get valuable customer data while doing so in a manner that makes their customers feel comfortable providing it to them. 

4. Be transparent with your consent and privacy practices 

Being transparent with customers about how your “identity platform” fits into your privacy platforms should make them more willing to share their personal information with the you and engage with your applications. Communicate with customers so that they’re aware you follow strict measures to keep their data safe, including how you use their data and who has access to it. 

Reassure them that devices used to manage customer inquiries are secure and the data is encrypted. Also, let them know that employees are required to keep workstations free of cellphones or other tools that may be used to record customer information, and these rules are strictly enforced. This information should also be communicated throughout your company so that everyone is aware and on the same page. 

5. Personalize the authentication process

Consumer trust can be enhanced by a customer experience that’s personalized to their preferences and needs. Your security and privacy process can add to this personalization. By monitoring their interactions through your digital experiences, you can learn about how they use devices, their media behavior, and overall preferences. The more you know about your customers, the better equipped you'll be to personalize how you interact with them while preventing fraudulent activity at the same time, benefiting both your customers and your business.

Time for re-examination and transformation

Customer trust is a key component in maintaining or boosting your business’ bottom line. You must protect their personal information starting from when they register on your site, through authentication, and when access is granted. It’s critical that the marketing and technology departments work together to transform your current customer identification and authentication process into one that

  1. Reduces (if not eliminates) customer frustration
  2. Protects the privacy of data and other confidential information
  3. Guards against cybercriminals

Your process should also allow you to track customers for future marketing and information gathering efforts, especially now that use of third-party cookies is going away by the end of 2023. This transformation can help your company build and maintain a loyal, happy customer base that trusts you enough to grant permission to use and share their data.

The six pillars of world class customer experience

These six pillars of customer service are essential for building a satisfied and loyal customer base and growing your business.

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Empathy

  • Organizations fail to act on inconsistencies and pain points of authentication processes
  • Organizations fail to clearly communicate data security, authentication process and rationale 

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Personalization

  • Fails to accurately use customer data to inform authentication
  • Fail to tailor authentication processes based on interaction channel 

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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 

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Expectations

  • Failure to provide a frictionless, secure, and simple authentication
  • Need to authenticate identity more than once during a single session

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Resolution

  • Failure to provide knowledgeable professionals providing resolution
  • Failure to provide efficient & effective resolution to authentication challenges

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​​​Integrity

  • Customers do not trust that data and personal information is protected
  • Risks of fraud or non-compliance for company and consumer

Footnotes

  1. Examples: California Consumer Privacy Act (CPA), the European Union’s General Data Protection Regulation (GDPR).
  2. Source: Gartner, How to Target Your Audience Without Third-Party Cookie Data (2021). GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved. 
  3. Source: Forbes: How to build customer trust without sacrificing the experience (March 22, 2021).
  4. Source: KPMG, A Novel Approach to Marketing Technology, (2022).
  5. Source: KPMG & CMO Council, Make Martech pay off (2021).


Co-authors:

Ian Benson, Director, Customer Advisory, KPMG US

Neil Hunt, Senior Associate, Customer Advisory, KPMG US

How KPMG can help you

KPMG has deep knowledge delivering on the trusted customer experience. Our connected customer model helps companies reframe their digital transformation efforts to focus on market relevance, customer centricity, organizational agility, and data security. Let our team help provide a more trusted experience to your customer. Contact us to see how to excel in a cookie-less world, operationalize and optimize your marketing spend, and provide trusted and secure experiences to your customers.

KPMG has deep knowledge delivering on the trusted customer experience. Our connected customer model helps companies reframe their digital transformation efforts to focus on market relevance, customer centricity, organizational agility, and data security. Let our team help provide a more trusted experience to your customer. Contact us to see how to excel in a cookie-less world, operationalize and optimize your marketing spend, and provide trusted and secure experiences to your customers.

Customer trust is a key component in maintaining or boosting your business’ bottom line. You must protect their personal information starting from when they register on your site, through authentication, and when access is granted. This transformation can help your company build and maintain a loyal, happy customer base that trusts you enough to grant permission to use and share their data.

Connect with us

For more information on how KPMG can help you excel in a cookie-less world, operationalize marketing expenditures, and provide trusted and secure experiences to your customers, please contact us below:

Jason Galloway

Jason Galloway

Principal, Advisory, US Customer Advisory Leader, KPMG US

+1 636-614-4250
Jeffrey Mango

Jeffrey Mango

Managing Director, Advisory, Customer Solutions, KPMG US

+1 404-614-8757
Deepak Mathur

Deepak Mathur

Managing Director, Cyber Security Services, KPMG US

+1 408-367-7676