3 ways how digital identity helps fintechs cut operational costs

Image for post
Image for post

Mexico’s rapid digital growth is redefining customer behaviors. Most Mexicans are avid Internet users. Majority of them owns a smartphone, and shops online. This is also driving their expectations towards how financial sector should interact with them. Innovation around how customers create their accounts and access financial services is much anticipated. But customers are not just asking for a more convenient access. They are also expecting service providers to address cyber security concerns and ensure their data safety.

At Xpass we are convinced that digital identity is the next step of innovation for Latin American financial sector. The implementation of digital identity has the power to unlock tremendous amount of growth. A good digital identity enables to automate and cut costs in several business processes, and give customers an easier access to services. All that with better security.

Digital identities are based on government-issued official IDs. With Xpass, customers can create their digital ID with 3 simple steps:

1. Download Xpass app

2. Create 2 security PIN-codes only they know

3. Take a photo of one of their identity documents and upload it

After that, we verify the user and their uploaded documents. If everything is correct, user has a working digital identity. This means they can now access multiple services with already verified profile.

Here are 3 ways how your business can cut operational costs with digital identity.

Image for post
Image for post

Your customers are impatient. And they can afford it since your competitors are fighting for their attention and money, too. E-commerce has figured that out. It has been reported that e-commerce giants like Amazon would lose over $1billion per year, if they were to slow down their page by just one second.

Did you know that fintechs lose on average up to 50% of their potential customers during onboarding process? That means, that after all the marketing and sales efforts, there is inefficiency and frictions in the onboarding processes, which drives up the user acquisitions costs. This is due lengthy forms with the added touch of bureaucracy. Think of it as asking your customers to wait in line for a service. No one enjoys that.

One of the ways to eliminate bureaucracy and give users instant access to services is by implementing digital identity as part of the user onboarding process. Digital identities allow companies to pull user’s data with their consent, avoid paperwork, make instant trust decision and create seamless processes.

Image for post
Image for post

Customers are asked to create and use multiple login credentials and passwords to access different services. But customers are having hard times keeping up with it. And data proves it. 21% of users will forget their password after 2 weeks of creating. Not only are these frictions annoying for customers, but this creates extra administrative cost for businesses. Forrester Research estimates that up to 50% of helpdesk inquiries are password reset requests. These password reset requests are overloading helpdesk, and negatively impacting employees’ efficiency. As a result, businesses are losing already onboarded customers.

Digital identity solves this problem. With Xpass there’s no need to remember multiple passwords or correct emails. Your customers can re-access several services with the same profile and with the same two security PIN-codes. Digital identity does not only improve customer experience. It lowers helpdesk hours spent on passwords reset request and results in higher product adoption rates.

Image for post
Image for post

Relying on regular passwords poses a security risk for fintechs, whose customers need to access their online profiles, which often contain sensitive personal data.

Although, Mexicans are digitally minded consumers, there’s a lack of knowledge and myths around safe passwords.

Most of online consumers tend to use weak passwords. It is very common for users to save all their passwords on their phone. They are using same passwords for multiple accounts, and fail to regularly change them. All of this makes your average consumer an easy target for cyber criminals.

Due to these reasons, financial institutions and their customers are under constant threat of getting scammed. Cyber attacks vary from fake calls, emails, SMS’ to even cyber criminals spoofing password reset requests to compromise accounts.

With digital identity, identity thefts become a secondary topic.

For digital identity is based on 3 aspects:

· Something the customer has (government issued official ID)

· Who the customer is (biometrics)

· Something the customer knows (2 security PIN codes)

Digital identity is a very user-friendly solution. Even if someone is trying to hack the user’s phone or hack their account, it will be quite obvious for the user. The customer gets notified with the request to submit firstly PIN 1 to access a service, and then confirm the transaction or action with PIN 2. But only the user knows PIN 1 and PIN 2, which means the user themself will have to enable the fraudster. With this solution, identity theft becomes a secondary topic. It is quite hard to steal someone’s identity.

Image for post
Image for post

Mexican are digitally minded consumers. They are asking and expecting digital, mobile first, simple and secure solutions. With digital identity fintechs can create seamless processes, onboard more active users and lower the threat of cyber attacks.

If you are looking for ways to improve or create digital user onboarding processes or give your customers a more secure way to authenticate themselves, we would love to have a chat with you. Get in touch with us over here.

Xpass is creating an ID wallet for seamless digital onboarding in Latin America

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store