Partner Article

The new digital world is revolutionising identity

Customer service is the most important responsibility for any business, even a legal practice. Failure to give customers a great experience affects your brand reputation and hinders loyalty. As organisations are striving to improve customer service through digitalisation, a key component of verifying individual consumers’ identities has been massively disrupted by digitalisation.

In a fast-paced personalised era, people expect simple, instant and easy interactions. This isn’t isolated to any specific task – everything from purchasing groceries, applying for a credit card, buying a house or pursuing a claim through the courts matters.

But digital technologies and procedures must comply with the EU’s Data Protection Directive and, from May next year, the General Data Protection Regulation. Identity verification will come under these laws and may impact in innumerable ways how businesses reach out to customers, what services they are offered, and how they are billed.

The challenge for the legal practice

It is important for any law firm to combine changes to behaviours and regulations in order to create a customer-orientated strategy that drives loyalty, efficiency and compliance. With client expectation and governance hanging over business strategy and processes, it can become a convoluted mix of services. At the front end, client details and personal interactions may be swift, personalised and client friendly – but then obstructed by slow, manual and inefficient processes in the background.

Complicating matters, individual rights still vary between European Union states. For example, automating vetting based on facial recognition is a solid privacy issue. Some EU countries don’t permit it, but the UK does, provided safeguards are put in place, such as allowing individuals recourse if they think their data is used in error.

It will be no easy thing for any business to balance the provision of services with proper verification standards and legal firms will be just as challenged to achieve the right mix of compliance with customers’ new expectations around how they feel digital services should work.

The rise of digital

Yet first and foremost digital isn’t new. The internet has been around so long that many younger people don’t know what life was like without it. However, a recent Experian survey suggests those older than 65 are the biggest users of the internet when it comes to account management such as online banking. This isn’t surprising considering they were the first true adopters of digital some 30 years ago and amplifies the length of time these services have been around. What digital services look like today is very different to 20 years ago – and firms need to consider the advances and speed of change that digital provides.

Society continues to embrace new uses of technology and people are increasingly turning to digital channels as a means of contracting and consuming products and services. Digital complements the pace and expectation of the client and is a great way of enabling a quick, consumer friendly engagement mechanism. But, with digital being so broad it needs to be embedded into all client touch points to deliver a better experience. The delivery and implementation of it however would benefit from a strategy that aligns to all processes, systems and software organisations use for delivery. For law firms, some processes can’t be digitally administered and therefore it is important that any digital strategy is considered amongst any governance and process needs. A good approach would be to look at the individual components and identify where digital can support and add value to the client experience. The result could lead to less churn and higher client retention.

Less haste more speed

With the vast majority of people working 9-5, being able to personally engage with clients can be a challenge. How do you balance the need for speed with legalities?

Areas such as consented data sharing will make processes quicker, for example when buying a house, as lenders can validate income and expenditure faster in order to proceed to offer. The pressure will then be put on the conveyancer to replicate this speed of process and initiate completion in good time. It is fair to say however that due to process and checks, time restraints will be outside of the direct control of the conveyancer – and therefore firms have a challenge of refining all areas within their control to excel the overall experience from the client’s legal services provider.

Digital delivery is one area where firms can enhance the speed of process, but other areas such as online identity validation will also enable a faster receipt of identity documents without missing vital checks and compromising compliance.

Know your client

Fraud derived from legal services is often high value. Last year mortgage fraud rose through an increase in identity theft – which puts added responsibility on legal firms to ensure they know who they are dealing with, and prove they can authenticate them. In April 2016 two conveyancing firms were held jointly liable for the sale of a property when someone had stolen the real owner’s identity. Not only was this costly, it was evidenced that neither party (buyer or seller) followed the necessary Anti Money Laundering regulation to prevent the fraud.

The days of a dedicated individual for managing all client legal affairs have passed and you will no doubt have moved to a more skilled and specialist approach to the specific areas of law you provide. As such, getting to know the individual by personal interaction has diminished and law firms need to consider new and compliant ways of meeting the same standard of validation by different processes. What’s important is you are assured that you ‘know your customer’ and you can validate and prove your processes to enable this. It is important to not confuse excellence with protocol and digital doesn’t replace the need for personalised and in-person contact.

Convenience vs. legal compliance

ID verification has changed. Today it’s not uncommon to see fingerprints being used to authenticate access into bank accounts, social media accounts being used to ‘create’ and access new service accounts from other digital providers, and passwords becoming a thing of the past.

Compliance is only increasing. The objective, regardless of which regulation, is generally aligned to one thing: the client. This includes their protection, their best outcomes and the value they receive in exchange for a service. The 4th Anti Money Laundering Directive is yet to be fully outlined and some elements within it are currently unclear. But, what is clear is the need for more rigorous checks to authenticate an individual.

General Data Protection Regulation, is another regulation that is set to transform processes in order to standardise and protect data and the individual who owns it. Fundamental changes such as the right to be forgotten at any point, the right to be informed of data use or the right to obtain copies of an individual’s personal data form the basis of its remit. This instils a more layered, uniformed and customer (or client) owned approach. It also enforces better storage of data, including security, and better value from the use of data that the individual controls.

These aren’t the only regulations that are being revised and developed. Compliance is an area that will continue to give organisations challenges when it comes to the process of implementation.

Organisations would be wise to consider how their current processes are developed and how they can adapt them when a change happens. This will enable a consistent and adaptable strategy that doesn’t cause friction and complies with regulation.

Balancing legacy

As a result of the constantly changing landscape, businesses can’t afford to take years to develop processes to meet the client expectation and those of the regulator. The difference in two years could be huge. Practices need to consider the future but also the now.

Legacy and long-term strategies need to be balanced to give the right mix of client consideration and excellent client strategies. In a world which is being heavily fuelled by data and digital – and growing - organisations need to get the basics right. These basics can develop a foundation that exceeds client expectations. Furthermore, it can enable you to identify who you are working with and who the client actually is. This is commonly known as achieving a single customer view.

For the prepared practice, the future is today

The future of ID verification is now. Businesses need to understand how they go about updating processes and replicating business models to make the change. These changes will only result in better client retention, satisfaction and service levels.

Data, digital and customer expectations are all components of the demands of today’s client. Looking to the future, organisations should be considering strategies that are flexible, adaptable and client focused. Firms would be best to consider the client outcome and customer interface before the technology.

Technology is evolving fast and the future may bring huge differences in how it is contracted to deliver a need. It is this need however that organisations need to understand – the how is secondary.

Gary McVie, Director of Fraud & ID at Experian

This was posted in Bdaily's Members' News section by Gary McVie .