In the midst of the pandemic and economic turmoil, seamless digital transactions will be at the epicenter of business survival, according to a study by the Economist Intelligence and Transunion.
Whether companies thrive or fold will hang on providing consumers friction-right digital transactions, the study overwhelmingly found. In fact, almost 85% of global executives surveyed as part of the study said they believe smooth digital transactions are “essential to business survival” rather than merely a competitive edge.
A total of 1,610 executives in places like Brazil, Canada, Chile, China, Colombia, the Dominican Republic, Hong Kong and the U.S. responded to the report, “New Dimensions of Change: Building Trust in a Digital Consumer Landscape.” How technologies like artificial intelligence, national digital IDs and super-apps can help overcome hurdles and possibly create new challenges to building digital trust were among areas exposed by the research.
Meantime, artificial Intelligence (AI), Biometrics, and National Digital IDs will have more prominent roles in fraud prevention.
“COVID-19 has dramatically accelerated digital transformation with 61% of our survey respondents saying their organization has changed their digital transaction process due to the pandemic,” said Shai Cohen, senior vice president of Global Fraud Solutions at TransUnion. “But 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 f executives in the study who said their company changed their digital transaction process as a result of the pandemic experienced glitches."
Respondents said in droves that biometrics will be the dominant payment customer authentication method and that improved fraud detection and security is the greatest benefit to using artificial intelligence. They also indicated that a national digital ID system will help put a crimp in consumer fraud.
On top of that, around 85% of executives say biometrics likely will be leveraged to authenticate the vast majority of payments in the next 10 years, while around 43% of respondents noted that improved fraud detection and security is the greatest benefit to using artificial intelligence.
The role of technology across all industries has become increasingly important since COVID-19 forced the implementation of stay-at-home orders and broader adoption of work-from-home options. Lenders have had to adapt quickly by making the lending process more accessible to consumers online, according to a TransUnion executive.
Liz Pagel, SVP and leader of the Consumer Lending line of business within the Financial Services Vertical at TransUnion, said the pandemic changed consumers' needs.
“Beginning from the very early days of lockdown and in-person interactions being shut down, almost completely in many geographies, consumers have had to shift to doing a lot of their financial service interactions online. There was a huge portion of the population who still used bank branches for all of their needs, and a lot of loans were underwritten almost entirely in person.”
So, with the pandemic coming into play, consumers had to be able to do those transactions online, and they shifted faster than I ever believed possible, she continued. “Lenders pivoted very quickly to allow them to transact online, and consumers switched as well. And those interactions are now kind of all happening online, a transition that we expected to take years and years, happened in a matter of months. So, a lot of originating loans online, and a lot of making payments online, a lot of doing all of those things and not in person.”