Every year, a higher proportion of global businesses goes digital. In 2024, Worldpay mentions online transactions are set to grow three times faster than in-store and will reach 17% of all transactions world-wide by 2027. In parallel with this shift to digital, new forms of fraud are emerging that exploit perceived weaknesses in digital defences – including synthetic ID, account takeover (ATO), and other forms of fraud linked to the artificial intelligence (AI) capabilities acquired by fraudsters in recent years.
According to Merchantsavvy, fraudulent transactions using payment cards alone are expected to increase to USD 43.47 billion per year by 2028, a rise of 21.5% from this year’s figure. In response, regulators are beefing up their requirements, with the EU’s Digital Operations Resilience Act (DORA) coming into force on 1 January 2025, and forthcoming PSD3 regulations (2027-2028) expected to double down on existing requirements relating to Strong Customer Authentication (SCA) and identity management.
It’s commonly accepted that powerful end-to-end authentication featuring one identity using tools such as Netcetera Identity help to cut fraud, speed up transaction flows, and improve service delivery while maintaining compliance. However, the benefits of CIAM solutions are broader, extending across the entire range of user touchpoints.
When it comes to building a business – and keeping customers happy – onboarding is where everything starts. Despite the importance of onboarding to growth, customer satisfaction and more, The Financial Brand reported in 2023 that one in four BFSI customers abandoned onboarding owing to overly complex processes with too many data inputs.
‘CIAM solutions make onboarding faster and easier at a time when 68% of Europeans have abandoned onboarding in the last five years.’
Armed with a single identity that can operate across a range of providers and channels (mobile, digital, physical), BFSIs can make onboarding faster and simpler for users. For instance, Netcetera Identity enables BFSIs to select the authentication processes required – and supports the use of national ID schemes such as BankID (Norway) and MitID (Denmark), among other European ID schemes.
CIAM solutions offer access to digital wallets and other services across their digital and physical product portfolios via a tailored onboarding flow. Likewise, CIAM solutions like Netcetera Identity that are equipped to handle FIDO2 authentications offer further options for BFSIs to establish a single, smooth ID and authentication process. Based on public key cryptography, FIDO2 simplifies authentication and ID based on inherence and possession, rather than knowledge – for instance, by using device identification supported by biometric factors or PIN. It’s both more secure and easier to use compared with legacy, knowledge-based user credentialling systems.
Since the eIDAS2 digital ID standard was recently put in force, it is even more important that CIAM solutions are ready to enable mobile Apps to support eIDAS compliant identity verification, digital on-boarding, payment authentication, and more use cases.
In selecting a comprehensive ID solution, BFSIs enable users to store and prove their identity anywhere in their digital estate. Armed with their single ID, users can register for services, login to apps and portals, enrol, or activate payment methods and apply for new products – all using the same ID solution. Because Netcetera Identity supports a variety of authentication methods, including passwordless and biometric ID, it can also be used in different authentication scenarios – including in-store shopping, government services, and more.
Aside from problems experienced when onboarding, users continue to suffer when trying to pay in-app or over web and mobile channels. Online authentication across the board continues to include complex, time-consuming authentication processes requiring multiple data inputs. It is why Shopify says 70.19% of consumers world-wide abandoned transactions in 2023, leading to lower revenue and profit growth for merchants, and lower card value and volume for banks and other organisations either issuing cards or acquiring transactions.
By using a single, comprehensive ID via CIAM solutions such as Netcetera Identity, BFSIs can speed up checkout online and (via biometric factors) in the physical world. Such Bring Your Own Identity and Single Sign-On services are great examples of the new wave of ‘phygital’ services which operate with equal effectiveness in both the physical and digital worlds. Retailers and providers of in-person services such as banking kiosks or insurance advisors can benefit from these rapid, easy-to-use authentication services.
BFSIs want to retain customers and keep their products and services top of mind. With their convenience, simplicity and ease of use across a range of physical and digital scenarios, CIAM solutions such as Netcetera Identity represent one of the best ways of achieving this goal.
Furthermore, a single, comprehensive ID across all services via CIAM helps BFSIs develop knowledge of how customers use both their services, as well as any external services accessed by the customer using the same ID – whether that’s onboarding, payment authentication, or others. Thus, BSFIs can develop and market services that fit a customer’s specific needs, from digital wallets to specific insurance lines the customer will be interested in depending on their usage and spending patterns.
By themselves, rising fraud risk and tougher regulations are reasons enough to introduce a single digital ID via a CIAM solution like Netcetera Identity. CIAM solutions empower users with faster access to services, less friction, and greater convenience. Moreover, the benefits of CIAM extend beyond security and regulatory compliance, giving users the ability to access more services both online and in the physical world. The added value this produces builds loyalty to your brand, encourages usage of your products, and gives you a significant advantage over competitors in an increasingly digital world.
Netcetera is a pioneering Swiss software company with forward-thinking digital solutions across the banking, payment, mobility, healthcare, and publishing industries. Netcetera creates growth opportunities for the businesses it works with by pushing the boundaries of digital possibilities. With its expertise and over 25-year track record, the company develops future-proof and scalable software that creates value for its clients and consumers. Netcetera is an expert at delivering seamless user journeys within highly secure and privacy-driven environments. Founded in 1996, Netcetera is a business of about 800 experts at its headquarters in Switzerland, and its locations in Europe, Asia, and the Middle East. Since 2020, Netcetera has been the digital powerhouse within the global security tech group Giesecke+Devrient (G+D).
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