Digital Transactions Surge Amid the Pandemic Could Be Permanent: Study
Economist Intelligence Unit and TransUnion report highlights which emerging technologies could present challenges and increase fraud prevention, economic inclusion, and consumer privacy
A new global and India study by the Economist Intelligence Unit for TransUnion has found the key to whether or not companies go out of business on providing consumers friction-right digital transactions. About 94 per cent of India and 85 per cent 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.
The report, titled New Dimensions of Change: Building Trust in a Digital Consumer Landscape, recorded responses from 1,610 executives in India, Brazil, Canada, Chile, China, Colombia, the Dominican Republic, Hong Kong, the Philippines, South Africa, the UK, and the US.
The research uncovered how technologies such as artificial intelligence (AI), national digital identification (ID) systems, and super-apps can help overcome hurdles and possibly create new challenges to building digital trust.
The report noted that biometrics will be the dominant payment customer authentication method with improved fraud detection and security is the greatest benefit to using AI, and a national digital ID system will help prevent consumer fraud.
“COVID-19 has dramatically accelerated digital transformation with 61 per cent of our global survey respondents saying their organization changed their digital transaction process due to the pandemic,” said Shaleen Srivastava, TransUnion India executive vice-president and head of Fraud, Solutions and Alternate Data. “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 global executives in the study who said their company changed their digital transaction process as a result of the pandemic experienced glitches."
According to the report, approximately 93 per cent of India and 85 per cent of global executives say biometrics are likely to be used to authenticate the vast majority of payments in the next ten years.
About 37 per cent of India and 43 per cent 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 per cent worldwide and 27 per cent in India. Furthermore, the vast majority of executives, 95 per cent in India and 79 per cent globally, think national digital IDs will help fraud prevention in consumer transactions, the report further said.
“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,” Srivastava added.
Seven in 10 executives globally and 93 per cent in India believe a national digital ID gives low-income groups access to consumer services they would have previously been excluded from. By industry worldwide, respondents from consumer lending and telecommunications 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.
The report, however, said that about 91 per cent of India and 73 per cent of global executives believe consumers are comfortable sharing personal data with private companies.
“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,” Srivastava concluded.