For years the concept and use of biometric identification, such as retina fingerprint and voiceprint identification, was only seen in movies. However today, these capabilities are fast becoming realities and what our technology and security savvy consumers are calling out for from their day-to-day service providers.

 

Gen X and Y, the pioneers of the modern digital era, are presenting today’s financial institutions with a new breed of consumer behaviours and requirements. When it comes to interacting with brands, we’re seeing this group shifting its security preferences, moving away from having to prove ourselves, to being recognised for who we are.

 

For instance, smartphones have fast become the product that most represent its owner. It is home to confidential and personal information, connects us to our bank accounts, and is even beginning to converge with our wallet to take over payments. Expectations around how financial institutions manage mobile identify have been transformed, so why shouldn’t our mobile device be able to recognise us for who we are too?

 

For financial service providers this presents significant opportunities to better engage with customers in a much more personalised way, but can we confidently say that we know what they want, and more importantly how close are we to providing it?

 

In my recently released report, Mobile Identity – The Fusion of Financial Services, Mobility and Identity, we explored this generational shift and how our identities and consumption of financial services are now inextricably fused with the mobile device.

 

In just seven years, since the advent of the smartphone, these devices have become the primary means for consumers to access financial services, with this inflection point forever changing the industry. 2014 was a landmark year in banking ushering in the age of mobile with devices now being the most preferred way for consumers to engage with their service provider.

 

We are now transitioning to an ‘omnipresent’ customer engagement model, characterised by expectations of predictive, personalised and presence-based financial application experiences that are part of the fabric of our increasingly interconnected lives. Gen X and Gen Y have become so dependent on their smartphones to access their financial services, that it’s led to a behavioral state we are calling ‘no-finapp-phobia’ – the fear of being without financial applications.

 

Globally, Telstra’s research reveals customers trust financial institutions more than other organisation types, but few are very satisfied with their current institution’s security performance. In fact, one in five consumers stated they would be happy to go as far as sharing their DNA if it would help secure their financial and personal information.

 

While the industry still thinks customers prefer passwords, it has become a sometimes flawed authentication method – everyone knows it.

 

To give an example, in Hong Kong the majority of consumers using mobile banking applications want their mobile devices to instantly recognise them via biometrics, such as fingerprint and voiceprint  instead of having to prove who they are with passwords and usernames. More than two-thirds of Hong Kong consumers think that using biometrics – such as voice, fingerprint, iris and facial recognition – would be more secure and help reduce the risks of fraud. These findings were consistent with consumers across Australia, Singapore, Indonesia, Malaysia, the United Kingdom and United States.

 

For financial institutions, mobile identity services deliver a wide-ranging payload – from improved acquisition and retention of Gen X and Y customers, thanks to developing trust in keeping finances secure, through to improved customer satisfaction and increased advocacy by developing trust in keeping personal information safe. In turn, this would see reduced incidences of fraud, security and privacy breaches.

 

More frequent access to consumers via the mobile of course yields more than simply retention and an increase of security. It means greater personalisation. This means it is easier to target with relevant services, provide products that suit specific needs, and improve customer experience across all channels.

 

The battle to acquire and digitally engage Gen X and Y is most definitely on. The Online Pure Plays are ‘winning wallet’ but is it now the Mobile Pure Plays turn?

 

As the centre of financial services gravity moves to Gen X and Y, we need to respond by designing identity services that accommodate the fusion of financial services, mobility and identity and that engender consumer trust and confidence. 

 

Undoubtedly, mobile identity is a fundamental enabler for innovation, and – just as importantly – is critical to the trust relationships that will unlock access to many wonderful new experiences that will be created as mobile financial services continue to evolve.