Digital IDs become more critical as online & mobile banking dominate
Rampant online fraud underscores why banks, neobanks and fintechs all need to offer consumers better protection for their data and their money. Without action, consumers could lose confidence in digital banking and ecommerce, hindering marketing efforts and ultimately growth.
Much has been made of how the pandemic shifted people’s movement toward digital banking into overdrive. Less attention goes toward the dark side of that massive change: the rise in online and mobile fraud due to inadequate means of assuring digital identification.
Digital ID became an issue the first time a consumer transacted on an early banking website, but the pandemic boom and the corresponding reliance on mobile devices has injected huge urgency into solving this challenge. Much more than banking is involved, as nearly every human activity that doesn’t require physical proximity seems to have moved to the internet.
“Online is the new face-to-face,” observes a study by IDology. The firm found that one out of three Americans signed up for digital delivery of services formerly provided in person. That’s 83 million people — or potential fraud victims if you are cynical.
A factor becoming increasingly evident is that as schemes for more secure and more reliable digital identification move forward, an inevitable choice will confront banking. It can lead the process, as an industry. It can share the process with other public or private entities. Or it can submit to a process devised by government or by another industry, such as Big Tech.
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