Mobile Authentication Only a Piece of the ID Puzzle, but Key for MNOs to Stay Relevant: IPification Webinar

Our latest webinar with Mr. Ruediger Koester was a blast.

The broadcast of the IPification webinar “MNO Experiences: Stepping beyond SMS OTP – protect the user’s trust via Mobile Identity” has finished. Register to watch the recording.

In the webinar, the IPification team hosted Ruediger Koester, an expert from the Telco industry with more than 30 years of experience in leading management roles of companies such as Deutsche Telekom.

Together with Stefan Kostic, IPification CEO, Mr. Koester shared his thoughts on the current and future impact of SMS OTP on MNO businesses, why MNOs should move beyond this solution, as well as what type of mobile authentication they should look for to help secure their key position in the mobile identity landscape.

The Future of Possession Pactor and Leveraging the User Trust

We are living in the ever-growing mobile economy that requires state-of-the-art mobile identity solutions to function. That’s why we’re seeing more and more companies enter this space, trying to offer what they believe is the future of mobile authentication.

In fact, mobile digital identity solutions growth is predicted to exceed 800% in the next 5 years. What’s more, unique global identifier services are expected to become the primary source of authentication for three billion users by 2024.

And who has the most power in this regard? That’s right, mobile network operators.

The two main solutions MNOs offer in this market today are the SMS OTP and header enrichment-based authentication, which we can all agree are not ideal.

From the perspective of user experience, SMS OTP is a hassle. On the other hand, header enrichment has a fantastic user experience. But from the perspective of security, both of these solutions fail to meet the current security standards. While SMS OTP is more secure, your SIM card could be swapped or stolen, or your phone hacked. Even worse, header enrichment is sent in clear text that is easy to hack.

With the appearance of other mobile authentication options such as biometrics or authenticator apps, we’re seeing companies from social media to mBanking apps move away from these solutions. To protect their revenues and their role in the mobile identity landscape, it’s time for MNOs to act faster.

SMS OTP isn’t the biggest source of revenue for MNOs, but when we look at the whole authentication and identity landscape, it represents one of the most important services that enable them to keep their strong position in the landscape and further strengthen their relationships with the customers.

Their position in the mobile identity space and the mobile authentication space is endangered by various OTT players, technology companies and third-party authenticator apps. This means that not only are they at the risk of falling behind others in the market, but the degree of the relationship they have with the customers is decreasing, too.

However, while it’s important to note the trending of these solutions, even with the tech giants like Google, Microsoft or Apple, all of whom offer authentication options based on the “possession” factor, it doesn’t mean that there is no space for MNOs. Quite the opposite.

To start with, MNOs enjoy greater user trust from mobile users than any other vertical in the identity space. 46% of consumers actually see MNOs as a likely provider of these services.

But more importantly, MNOs have network capabilities and tech infrastructure that is able to offer truly frictionless authentication experiences, one of the most important factors consumers consider when choosing their preferred authentication option.

While corporations can mandate their employees to use authenticator apps and other inconvenient authentication methods at work, the case is different with private individuals.

To illustrate, 23% of individuals believe SMS or mobile authentication app 2FA methods are very inconvenient, while 56% will only adopt new technologies that are easy to use and significantly improve account security.

That opens up a huge opportunity for mobile network operators to take the leading role in solving user friction to secure their key position in the market.

How Mobile Authentication Can Enable MNOs to Stay Relevant in the Mobile ID Space

While MNOs certainly realize the importance of mobile identity service and authentication, it might be observed that they are moving at a slightly slower pace when compared to the industry. However, having in mind the size of telco companies, this is to be expected.

They constantly experience big pressures from the market where they compete for customers all the time, trying to provide better existing services at lower prices. It is much easier to calculate your revenue when you reduce existing costs than to calculate new revenue from newly-introduced services.

MNOs very well understand how important mobile identity is for their business, but that shouldn’t mean that while waiting to develop their all-encompassing mobile identity solution they shouldn’t start working on smaller pieces, such as mobile authentication.

By implementing a competitive mobile authentication option, they would be able to monetize and regain their position with this piece of the mobile ID story, making it easier for them to overtake the whole identity story as a separate entity.

To speed it up even further, instead of developing their own solutions which could take years, they could consider off-the-shelf, readily-available mobile authentication solutions that rely on their technological infrastructure. And their technological capabilities to provide maximum security with a phenomenal user experience are unmatched.

Solutions such as IPIfication help put the operators back in the driver’s seat when it comes to a digital transformation where they were expected to be the leaders from the get-go.

We talked about all this and more in-depth in our webinar with our guest Ruediger Koester and our CEO, Stefan Kostic. Register to watch the recording.

More on our blog