Putting digital ID solutions in the center of digital transformation is the top-priority of retail banking in 2021.
Consumers are gradually developing the habit of using digital channels to purchase necessary goods and services. As the number of online transactions increases, a digital ID network is essential to ensure security and prevent fraudulent transactions.
Banks are taking a leading position in implementing digital id solutions. Indeed, over the past decade, they spent an average of more than $1 billion per year on identity management solutions.
Let’s find out which factors contribute to accelerating digital ID growth in retail banking in 2021.
The factors that make digital ID become top-priority in retail banking in 2021
Sophisticated registration and identity verification processes
The complexity and length of the registration process are the two main factors that lead to customers abandoning a bank’s services. Making authentication more efficient and secure means that banks can help customers open accounts, make transactions faster, and more convenient.
Digitalization of the verification process and identity storage will be complete for this goal. Sinicat – a company that provides electronic identity services – stated that 60% of European consumers expected a 100% digital integration experience related to identity management by 2021.
Covid-19 as a factor of leverage
The digital banking trend was well grown before the pandemic, but digital service usage numbers skyrocketed in 2020, especially among new users when the pandemic hit the global.
Financial institutions (FI) of all sizes will have to look at the lessons of 2020 when planning and digital banking play a central role. The in-branch operations will also likely need to be adjusted to accommodate the new post-pandemic paradigm.
A recent survey found that 73% of bank customers are now mainly leveraging digital channels for their banking needs and that 21% of these regular users are first-time users. Also, even when the pandemic ends, 76% of Mastercard users affirm that they will remain in the habit and plan to continue making digital payments in the future.
However, FIs should not take this customer loyalty for granted and continue to work to satisfy customers where they are located both through direct and digital channels. A crowded group of bank customers has expressed interest in using real affiliates more if they offer some of the same conveniences as mobile banking. For example, 34% prefer self-service screens and 31% like the ability to schedule virtual video meetings with banking professionals instead of going to a bank branch. One thing for sure that security and privacy are required.
The combination of digital banking and physical banking could define the FIs of the future, meeting consumer needs for safety and convenience. Banks experiment with these features and accelerate a more secure, seamless multi-channel experience to maintain customer loyalty in an uncertain future.
To truly digitize banking services, customer centricity, and deployment of digital id solutions are essential.
Trust and Transparency. Blockchain digital ID solutions remove barriers to customer access
Customers today are frequently asked to provide different organizations with their information about what they are willing to share. Since, however, the need of customers to have control over their data is rising, which requires the tools to guarantee their control and transparency of the process.
A possible solution to this need is a distributed ledger, with blockchain as the underlying technology. Blockchain can provide a transparent network that gives financial institutions the ability to share data and allow customers to check their identity once between multiple institutions.
Decentralized blockchain networks make it nearly an impossibility for hackers to access confidential data stored there. The customers become their digital identity guardians instead of committing to providing their information while interacting with separate organizations.
Accordingly, new digital ID programs must cover the following requirements:
- A user-friendly approach with an appropriate related process.
- The engagement of associated entities across the systems to precisely approach more customers creates trust and supports mass adoption.
- A strong brand to bring confidence to all participants – partners and especially customers.
- High security with verification solution based on emerging technology.
Blockchain may remain just a buzzword until both businesses adopt, and consumers demand it stronger. The encounter between identity solutions urgent in the pandemic and the technology readiness has set a milestone for the explosive development of digital id applications in 2021.
By offering ready-to-use digital ID solutions based on a distributed ledger, akaChain will help businesses move closer to their efficient data management/exploitation goals and meet consumer expectations into digital banking services.
Much work remains to be done to ensure that customer data is in good standing that can drive the future’s digital banking models. Banks should prioritize this primary step to help them participate in the open future of retail banking.
akaChain is backed by FPT Software, a globally leading technology, and IT services provider. It is an end-to-end, permissioned, multi-chain network based on the Hyperledger Fabric. Since its Establishment in September 2018, akaChain’s product has assisted many enterprises, from SMEs to Fortune 500 firms, to transform with distributed ledger technology. The company provides a broad range of permissioned blockchain-based products and services in multiple sectors, including retail, supply chain, banking and finance, insurance, shopping mall management, etc. to transform with its distributed ledger technology. For more information, please visit https://blog.akachain.io/.
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