The 2018 data breaches remain top-of-mind. Data privacy and new regulations are impossible to ignore in the loyalty space. Because of this reality, Loyalty360 has reached out to brands to better understand how these issues impact their loyalty efforts, particularly where personalization and data acquisition is concerned.
To learn about another side of data security, the consumer side, we recently had the pleasure of speaking with Chris Ryan, Experian’s Senior Fraud Solutions Consultant. His company has completed its 2019 Global Identity and Fraud Report, which is focused on consumer attitudes regarding the key factors that give them more trust and confidence in an increasingly digitally-reliant world. Ryan referred to the report as “a piece of insight that we think is indispensable to the health and long-term growth of our business.”
We asked why the United States has been more affected by data breaches than other countries. He replied, “Other parts of the world, where there’s less developed data assets to manage identity, there’s more reliance on high friction methods of verification. In a place where they might not be able to use data to confirm that your identity is legitimate (that you are who you claim to be), they might ask you for a piece of documentation. The reliance on data in the US makes the data more valuable to criminals, so there’s an incentive to steal it.”
Consumers in many parts of the world would not consider a request for documentation to be inconvenient. US consumers, Ryan said, have grown accustomed to low friction access, a convenience standard that doesn’t exist in much of the world. But, low-friction verification has often been perceived as a lead into increased fraud.
However, Ryan stated, “One of the most important outcomes of the research was the consumer sentiment, where at least from the consumer perspective, security and convenience aren’t in as much conflict as we would have believed in the past.” American consumers, he said, want to see a combination of both.
“Consumers are saying, ‘Hey, I want to see visible signs of security. I trust a brand that is transparent about how they use my data. I’m willing to give more information, if there’s a trade-off for more security.’” Brands can ask for personal identification as long as they make clear that it’s for the consumer’s security.
Loyalty360 inquired about how data concerns have impacted consumers’ trust. Ryan said, “Trust is difficult to measure empirically.” He did note, however, that some sense of consumers’ trust in brands can be studied by asking them how they personally define trust and what factors affect their trust in a given entity.
“Breaches impact brands on a more specific level than industry,” Ryan said. “Our study suggests that 61 percent of consumers have the most trust in banks and insurance companies. That is, in some respects, due to that industry’s resilience to data breaches.”
He continued, “The individual damage is more immediate, but it seems to fade into more reputational damage at the industry level or the vertical level.”
It’s good to know that, thanks to Experian’s report, brands can start taking a more nuanced approach to balancing security and convenience. Transparency is a must, of course. Brands have the opportunity to gain customer trust by letting them know how a little extra effort can lead to a much safer digital experience.