Satisfied with the ability to verify legitimate customers, lenders are investing in targeted marketing to entice more consumers. Those consumers, however, aren't confident in the way lenders authenticate them online, and are less open to receiving those marketing messages as a result.
Auto lenders, particularly those that offer multiple consumer credit products, should prioritize a refined and secure digital experience over their marketing messaging, a new report from Experian says.
A disconnect between lender and consumer expectations is among the findings of Experian's latest global fraud report, an annual study that surveys 6,500 consumers and more than 650 businesses across 13 countries globally.
The report found that 96 percent of U.S. businesses that responded are confident in their ability to identify and verify customers digitally, while 45 percent of consumers responded that they didn't feel recognized by businesses. Christopher Ryan, a senior fraud solutions business consultant, said most consumers find reauthentication measures from lenders needlessly burdensome.
For example, Ryan says customers verified by a lender through one device find it irritating when they need to jump through hoops to log into an account on a separate device or computer.
"You have this disparity where the advanced analytics are driving the offers and not the recognition of the person," Ryan said. "And the person is saying, you have to recognize me first."
High confidence among businesses in recognition and screening isn't helping when it comes to fraud losses. Annual losses from fraud are rising at more than half of businesses surveyed — which Experian says often result in an inability to recognize customers. A vast majority of consumers prefer biometrics, which lenders are increasingly adopting to recognize and vet customers.
Delivering on customer expectations for security and convenience should be a priority for auto lenders. While leveraging data to serve personalized products and offers is a winning strategy, customers are wary of responding to those messages if they're unsatisfied with other elements of the digital experience.