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Consumers have become dependent on digital interactions, and they are focusing more on privacy as a result. They want to feel secure and avoid processes that take too long when sharing their personal information, but their skepticism of technology can serve as a major stumbling block. One survey revealed that 82% of United States adults are concerned that their online data may not be secure and that 82% also would like to have a better understanding of the personal information companies have collected. In fact, just 39% said they know where their online data is stored.
Regardless of their data-related concerns, 59% of consumers said they would be happy to allow companies greater access to their personal data if doing so gives them a better user experience. This means organizations stand to attract new customers — and engage and retain existing ones — if they can implement digital identity solutions that offer customers smooth onboarding and authentication experiences that do not skimp on security and privacy.
This month, PYMNTS examines consumers’ desires for privacy and security as they continue to tackle everyday activities such as banking and shopping digitally. It also examines what consumers really want from companies that have access to their personal data.
Privacy Concerns Are Ubiquitous, but Reasons Vary
Consumers in certain markets tend to take old-school approaches to storing personal information. Research shows that U.S. consumers’ most preferred storage solution for personal details is to jot them down on paper: 54% of adults prefer this method, according to one study, including 68% of those in the 18-to-24 age range. While 49% of adults are comfortable using some electronic storage method to secure sensitive information, those ages 18 to 24 were most comfortable using a cloud-based method.
Still, 80% of U.S. adults say they have concerns about storing their private data on the cloud — a
sizable majority, although the sources of these concerns vary. The most common concern, shared by 31% of adults, is that their information might be stolen, yet 18% said they are worried they will forget the password to access their data and 15% fear their data could be sold or shared without their permission.
Despite these concerns, only 9% of North American consumers feel strongly that they understand how to keep their personal data secure, and just 18% believe they have the tools to navigate the world of data privacy. Most North Americans also report being suspicious of what companies do with personal information, and 69% want better explanations from technology companies about how they make money and handle personal data.
Companies that address these concerns have much to gain, as 63% of North American consumers said organizations’ data-handling methods and ethics would influence whether they choose to do business with such entities.
Some consumers have stuck with businesses despite data breaches or failures to protect sensitive data, but this decision could have more to do with a perceived lack of alternatives rather than enduring trust. Sharing personal information with companies is a “necessary evil” for 67% of consumers, and 85% are on the lookout for companies they feel they can trust.
Solving the Privacy Disconnect Between Businesses and Consumers
While 76% of business leaders said there is a crisis of consumer trust in technology companies, 80% gave their own companies an A or B grade in regard to tapping solutions that protect user data, and 55% believe consumers’ trust in their technology is rising. The story is different among consumers, however, with 21% saying their trust in businesses’ technology is growing and 28% saying their trust is waning.
Companies largely put themselves on the hook when it comes to being responsible for privacy and security: 58% said this responsibility falls on them rather than on government regulators or consumers. Additionally, 85% said their companies are compliant with the highest security and privacy standards set by governments around the world.
What consumers want and what companies are prioritizing may not always be in alignment, however. Consumers are concerned about data breaches and other failures, but they are even more attuned to matters regarding data transparency. Forty-four percent of consumers want to see visible action and full transparency after a data breach, 39% want to know how companies use or monetize their data and 39% value transparency in how their data is shared.
Authentication-related friction can f
rustrate customers, but data shows that the added sense of security more than offsets this dissatisfaction in most cases. Research suggests businesses may in fact focus too heavily on eliminating friction at the cost of ensuring security — a move that ultimately can harm customer satisfaction. This is particularly notable as consumers gain familiarity with seamless authentication methods such as biometric identification and secure tokens that can improve transaction security while reducing friction.
Customers still want transparency among businesses offering innovative authentication solutions, and clear communication from companies can assure users that the digital identities they use to access personal data are secure. Many governments are setting the groundwork with legislation to protect consumers’ digital identities.
Consumers will continue to expect companies to transparently and responsibly handle and manage their personal information, while governments are all but certain to step up their regulatory efforts. Companies adopting the right digital identity solutions to keep their customers’ experiences fast without compromising security and privacy will be best positioned to build consumers’ trust in the long term and earn their continued loyalty.
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