60% of Users Abandon Transactions Due To Authentication Frustration

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Consumers overwhelmingly prefer to do business with companies that make authentication both simple and safe, according to a survey of 2,000 consumers by the BPI Network and CMO Council.

Frustration with cumbersome and repetitive authentication processes are overwhelmingly causing consumers to search for brands and digital experiences that securely unify and simplify identity verification, according to a new report by the Business Performance Innovation (BPI) Network and CMO Council, entitled Authentication Frustration. How Companies Lose Customers in The Digital Age.

Based on the survey of 2,000 consumers, the study finds that 81 per cent prefer to do business with companies that do a better job of recognising and verifying their identity “simply, quickly and safely.” Over 60 per cent of respondents say they have abandoned business transactions due to authentication frustration.

Problems with passwords remain a major grievance of consumers, who say they strongly prefer physical biometric authentication methods, such as facial and fingerprint recognition. Almost seven in 10 consumers (68 per cent) say they have problems remembering and using passwords. Forty-per cent of respondents report using at least 11 passwords, including 23 per cent who have 16 or more.

“Password pain is hardly a new phenomenon. Yet, it continues to be a persistent problem for consumers,” said Donovan Neale-May, Executive Director of the CMO Council and BPI Network. “Businesses and brands need to listen to what consumers are so clearly telling them. Simplify and improve authentication and you will gain customer loyalty and grow your business. Fail to do so, and you can expect greater customer churn and revenue losses.”

“Data protection, privacy and identity theft are massive challenges for today’s digital business world,” said George Skaff, senior vice president of marketing at Daon. “The issue has become significantly more severe in recent months as consumers relied heavily on digital transactions throughout the Covid pandemic. At Daon, we believe companies need to adopt an Identity Continuity model of authentication, in which biometric and non-biometric factors come together on a single platform to create a unified identity experience across the entire customer relationship lifecycle—from identity proofing and onboarding to authentication and recovery.”

Market data shows that consumers have dramatically accelerated their use of digital channels and interactions during the pandemic. A recent study by McKinsey found that global business executives estimate that their digital interactions with customers and partners have accelerated by some three to four years due to the pandemic.

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Key findings in the Authentication Frustration report:

• 85 per cent of respondents say a difficult authentication process reflects negatively on a company and its brand, including 53 per cent who say it has a “major” or “significant” negative impact.
• Financial services companies are a frequent source of authentication frustration. Consumers say the top areas where the encounter difficult identity experiences are:
  • 43 per cent — Digital devices
  • 37 per cent — Banks
  • 29 per cent — Credit and debit cards
  • 27 per cent  — Mobile payment services
• Most vexing problems with passwords:
  • 55 per cent — Keeping track of numerous passwords
  • 43 per cent — Needing to re-create passwords
  • 34 per cent — Being asked to strengthen passwords
  • 25 per cent — Coming up with new passwords
• Consumers overwhelmingly prefer biometric authentication, including the use of voice, fingerprint, face, eyes, and behaviours.
  • 44 per cent say they “absolutely” believe biometric authentication is an easier and better form of verification
  • 34 per cent say they would prefer to use biometrics as long as it is secure
  • Only 10 per cent prefer passwords and other forms of authentication over biometrics

Experts warn that there is no foolproof form of authentication, and even biometric methods can be compromised. Yet, most agree that done right, biometrics can offer a safer and more secure approach to authentication, while simultaneously delivering greater consumer convenience.