The global pandemic has brought to light the overwhelming importance of effective digital ID management. Let’s talk about how COVID-19 has fast-tracked the authentication space and what that means for moving forward.
At the start of 2020, most of us were no strangers to online transactions. After all, do you remember the last time you physically went somewhere to pay your bills? I don’t.
That is all thanks to various forms of digital identity management, which worked fairly well. However, when the pandemic started and we were forced to take almost all aspects of our lives online, systems were suddenly overwhelmed.
What was exposed during this massive digital transformation was the fact that the majority simply weren’t ready for such an uptake in usage, both from a technological point of view and, more importantly, in terms of digital ID verification.
In fact, 71% of UK business decision-makers believe that the shift to digital that COVID-19 has caused has increased the likelihood of a cyber breach. Moreover, 46% of them have already noticed an increase in phishing attacks.
In other words, digital identity verification checks are an active vulnerability that should be mitigated sooner rather than later — and especially with the great increase in adoption that we’ve seen over the last few months.
I’ll give you some numbers.
COVID-19 as the Catalyst of a Full-On Digital Transformation
The pandemic has driven an overall increase in all things digital — so much so that IDNow reports a 26.8% overall increased demand, and this is true both for individual and work-related matters.
Take yourself or people around you, for example. Most of you have been working from home, right?
Most likely, and there’s data to illustrate this. In Switzerland, the number of remote workers has doubled from around 25% to almost 50%. This picture is pretty much the same around the world.
Additionally, the usage of transactional apps has skyrocketed.
Compared to last year, transactions are up 40% across 850 US retail eCommerce domains. Moreover, PayPal reported 7.4 million net new active accounts with a record of 250,000 net new actives per day in April. They have experienced a 20% increase in transactions over the same period last year.
In fact, May 1 was the day with most PayPal transactions, ahead of even Black Friday and Cyber Monday of last year!
What does this mean in practice? Let me paint a picture for you.
Digital identity management systems around the world, already struggling to cope with the increase of digital services usage, are suddenly experiencing an immense growth of digital identity verifications, many of which guard incredibly sensitive data, and many of which are guarded by authentication methods already proven ineffective.
Beyond being a catalyst for digital transformation, the pandemic has shed light on the crucial importance of effective digital ID management, especially passwordless authentication and transaction verification, if current trends are to be sustained.
For businesses, this is true both internally, with regards to the increase in remote working, and externally, when it comes to servicing customers in a secure manner. As we slowly emerge from lockdown, providing a secure online environment for workers and customers will be of utmost importance, even more than it was before COVID-19.
The Implications of Effective Mobile ID After COVID-19 to Increase Manifold
I’ll say it right away: effective digital identity management is vital for companies that want to stay in business both during the pandemic and after it is over.
I’m speaking from experience in the digital identity segment IPIfication that is all about — passwordless authentication, mobile user and transaction verification, SIM swap, and fraud prevention.
It’s very simple. Companies that have provided their customers with frictionless and secure authentication experiences, making their life just that little bit easier when the world has been turned upside down, will earn their long-term trust.
Let me ask you this. After we’re out of lockdown, will people just revert back to their old habits?
I’m guessing they won’t.
As people slowly go back to living their lives, they are likely to do so with caution, avoiding unnecessary physical contact as much as possible. On top of that, we’re creatures of habit, and let’s just say that during the lockdown, new habits were formed.
This means that effective digital ID authentication processes and mobile fraud prevention options will be crucial for success after the pandemic. The companies that have earned user trust during the lockdown and the companies that are quick on their feet to implement effective authentication systems are likely to come out on top.
This isn’t to say that all of this wasn’t the case before the pandemic. McKinsey reported a few years back that consumers who find authentication convenient used digital services 10 to 20% more than those who were frustrated by it. Moreover, it was these customers that were the source of the most revenue, spending around 45% more than their counterparts.
The pandemic has simply brought the implications of this problem to a whole new level.
Businesses will have to effectively sustain the ever-increasing adoption of digital services to be seen as reputable and trust-worthy with their user base, and this will primarily be done through effective, yet seamless MFA protocols.
The ones that uphold the principles of security, user privacy, and user experience, and that can be implemented as part of one large multi-factor authentication system.
That’s precisely how we’ve designed IPification. It relies on already-existing mobile operator data, against which it continuously compares SIM card and various device data to authenticate within milliseconds in the background — without actually transferring any sensitive private user information. Now… That’s neat.