Why robust identity protection is essential for fintechs looking to gain ground in 2024
By Ashley Diffey (pictured), Vice President of Sales APAC and Japan, Ping Identity.
With customers increasingly fearful of their personal data being compromised, providers need to invest in measures to allay their concerns.
Australians are an innovative bunch and nowhere is that magical combination of originality and entrepreneurship more evident than in the local fintech sector.
The country is home to more than 800 fintech companies which collectively form an industry that’s been in high growth mode in recent years. Its total worth is up from $250 million in 2015 to $45 billion in 2023, according to Fintech Australia, the peak body for the sector.
Stand-out success stories include the likes of Afterpay, the Buy Now Pay Later pioneer that was acquired by US tech giant Square for $39 billion in 2021 and Athena, the home loan platform backed by some of the investment sector’s heaviest hitters.
These one-time upstarts and their lesser-known counterparts owe their popularity to the great Australian public – to consumers who’ve been willing to eschew the offerings of traditional banking and insurance providers in favour of giving newer players a go.
Fifty-eight per cent of Australians have done so in some guise, according to the Global Fintech Adoption Index, and this number is expected to rise further over the upcoming years.
Transacting securely
That’s always assuming the fintech sector is able to provide Australians with the assurance they need to transact with confidence. Because when it comes to sourcing financial services online, today’s customers aren’t only concerned with keen rates, convenience and customer experience. Increasingly, they want to know that the personal data they supply to providers will be safely collected and stored.
In the wake of the 2022 Optus and Medibank hacks, which saw the personal details of more than 11 million customers compromised, individuals have become alive to the risk of identity theft and it has them worried.
It’s now the chief concern for 65 per cent of Australians when their details are posted or stored online, ahead of financial loss and surveillance, according to a recent survey evaluating Australian consumer sentiment around engaging with brands and businesses online.
Given Optus and Medibank customers were encouraged to replace their passports and drivers licences as quickly as possible, to reduce their risk of identity theft, after news of the hacks broke, it’s not hard to see why.
Impersonator anxiety
Artificial Intelligence has only compounded Australians’ fear of having their personal data out there on the dark web or in the hands of cyber criminals intent on exploiting it for commercial gain.
More than half of the respondents in Ping Identity’s Brand Loyalty in The Age of the Digital Economy survey were concerned about the prospect of AI technology being harnessed to create impersonations.
Many feel uncomfortable sharing a range of personal information, including their gender, age, phone number and date of birth, with businesses and organisations, and only 60 per cent stated they had full trust in banks to manage their identity data.
More than two-thirds of survey respondents thought they’d never be fully in control of their personal information online, while 77 per cent wished to limit both the types of information about themselves companies were able to access and the number of companies that currently had access to their details.
Providing the protection customers are craving
So, can fintechs allay these very real fears and reassure Australians that dealing with them online won’t result in their personal and financial details being compromised down the track?
The answer is yes – by implementing robust identity and access management processes that make it much more difficult for hackers and cyber-criminals to gain the ‘in’ that they’re seeking. Biometric authentication, Multi-Factor Authentication and one-time log in codes sent via text or email can provide customers with enhanced protection and an increased sense of comfort when they’re dealing with financial services providers of all stripes.
Together they offer an effective solution to the identity theft issue; one that doesn’t require users to endure arduous log-in processes or remember a complex new password every other week.
A solid foundation customers can bank on
Australians have long been enthusiastic participants in the digital economy and the future of the country’s financial services sector will indubitably be digital. Fintechs have a golden opportunity to seize mind and market share from established players in the coming months and years, provided they’re able to gain and maintain customer confidence and trust. Implementing robust identity management infrastructure is the key. For emerging players that hope to retain and grow their share of the country’s multi-billion-dollar spend in 2024 and beyond, it’s an essential technology investment and one they can ill afford not to make.
