AI, Biometrics Can Prevent Frauds in Digital Payment
In the digital world, customer trust has become the ultimate currency. So much of the business we engage in today is done digitally without any face-to-face interactions, so building trust among customers is the only way to sustain long-term success. However, trust is at an all-time challenge and looking at the various data breaches and hacks over the last couple of years. Experts believe that new technologies such as Artificial Intelligence (AI), Biometrics and National Digital IDs can play an increasingly important role in fraud prevention in the digital payment space.
A new global study by the Economist Intelligence Unit further substantiates the fact that consumers have a strong preference for frictionless digital transactions and that’s what companies should aim at. The study done in association with TransUnion found that about 94% of India and 85% of global executives surveyed as part of the study said they believe smooth transactions are “essential to business survival” rather than merely a competitive edge. (Read the full report here)
“COVID-19 has dramatically accelerated digital transformation with 61% of global respondents saying their organization has changed their digital transaction process due to the pandemic,” said Shaleen Srivastava, executive vice president and head of Fraud, Solutions and Alternate Data at TransUnion in India told CXOToday.
But she believes that all of this digital progress will be wiped out if we can’t remove these barriers to building bilateral digital trust. “For instance, two-thirds of global executives in the study who said their company changed their digital transaction process as a result of the pandemic experienced glitches,” he said.
The study found that new and emerging technologies can provide them the much needed smooth digital transaction experience and prevent fraud. For example, they believe that biometrics will be the dominant payment customer authentication method. Again AI in the digital payment systems can help improve fraud detection and security.
Approximately 93% of India and 85% of global executives say biometrics are likely to be used to authenticate the vast majority of payments in the next 10 years. About 37% of India and 43% of global respondents noted that improved fraud detection and security is the greatest benefit to using AI. This was the top selection by far with smoother customer experience being the second most used answer globally at 29% worldwide and 27% in India.
Furthermore, the vast majority of executives, 95% in India and 79% globally, think national digital IDs will help fraud prevention in consumer transactions.
“Ensuring consumer trust starts with preventing fraud. Our research overwhelmingly showed that biometrics, AI and national digital IDs aren’t just a fad for consumer fraud prevention. They are the keys for trusted commerce for the foreseeable future,” said Shaleen.
“Technological innovations like AI, biometrics and national digital IDs paired with proven fraud prevention methods like device intelligence can provide a more convenient and inclusive way for consumers to transact that still protects security and privacy,” he concluded.
The key takeaway of this study for organizations is that as companies shift to digital channels for making purchases and interacting with customers, it’s crucial to focus on building customer trust by using emerging technologies that fits the digital landscape. The study also emphasizes on the fact that companies need to be better listeners and information sharers, while also providing personalized support as they into the right customer data and use it in a way that doesn’t cross boundaries.