New Study Finds Smooth Digital Transactions “Essential to Business Survival” During and After Pandemic
Economist Intelligence Unit and TransUnion report highlights which emerging technologies could present challenges for and increase fraud prevention, economic inclusion and consumer privacy
A new global study by the Economist Intelligence Unit and TransUnion (NYSE: TRU) has overwhelmingly found the key to whether or not companies go out of business hinges on providing consumers friction-right digital transactions. Nearly 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.
Overwhelmingly Global Executives Believe Smooth Digital Transactions are Essential to Survival
“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 of executives in the study who said their company changed their digital transaction process as a result of the pandemic experienced glitches."
The report, “New Dimensions of Change: Building Trust in a Digital Consumer Landscape,” included responses from 1,610 executives in Brazil, Canada, Chile, China, Colombia, the Dominican Republic, Hong Kong, India, the Philippines, South Africa, the U.K. and the U.S. The research uncovered how technologies like artificial intelligence (AI), national digital IDs and super-apps can help overcome hurdles and possibly create new challenges to building digital trust.
Artificial Intelligence (AI), Biometrics and National Digital IDs Will Play an Increasingly Important Role in Fraud Prevention
Overwhelmingly respondents answered that: 1) biometrics will be the dominant payment customer authentication method; 2) improved fraud detection and security is the greatest benefit to using AI; and 3) a national digital ID system will help prevent consumer fraud.
Approximately 85% of executives say biometrics are likely to be used to authenticate the vast majority of payments in the next 10 years. About 43% of 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 at 29%. Furthermore, the vast majority of executives, 79%, 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 key for trusted commerce for the foreseeable future,” Cohen continued.
National Digital IDs Hold the Key to Economic Inclusion
Seven in 10 executives believe a national digital ID gives low-income groups access to consumer services they would have previously been excluded from. By industry, respondents from consumer lending and telecommunications are most likely to think such IDs give lower-income groups access to services they might otherwise lack. Both industries have led the way over the last decade in reaching the community of financially-underserved customers, manifested in innovations like microfinance and mobile money.
Executives Believe Consumers are Comfortable Sharing Personal Data
Nearly 73% of executives believe consumers are comfortable sharing personal data with private companies and 71% with governments. Brazilian, Chinese and Dominican Republican executives have vastly differing views about whether or not consumers are willing to share data with private companies versus government bodies (more than 10% difference in each country between sharing with governments and companies). Chinese respondents believe consumers are much more comfortable sharing personal data with government bodies than companies. Brazilian and Dominican Republican executives have the opposite belief.
“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,” Cohen concluded.
For the survey findings and registration information for a Dec. 3 webinar about the study, go to the report website.
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing a comprehensive picture of each person so they can be reliably and safely represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good.®
TransUnion Global Fraud Solutions unite both consumer and device identities to detect threats across markets while ensuring friction-right user experiences. The solutions, all part of the IDVision® with iovation® suite, fuse traditional data science with machine learning to provide businesses unique insights about consumer transactions, safeguarding tens of millions of transactions each day.
A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.
About The Economist Intelligence Unit
The EIU is the thought leadership, research and analysis division of The Economist Group and the world leader in global business intelligence for executives and professionals. We uncover novel and forward-looking perspectives with access to more than 750 analysts, experts and in-country contributors that produce best-in-class intelligence for over 200 countries and regions. More information can be found on www.eiuperspectives.economist.com. Follow us on Twitter, LinkedIn and Facebook.
 National digital ID initiatives are government-administered programs to provide a digital identity to residents, often using biometric data to authenticate identity.
 Super-apps are single digital portals, predominantly accessed via smartphones, through which customers access and pay for third-party products and services.
 Biometrics are defined as fingerprint, facial recognition or voice authentication methods.