Are Passwords Done or Here To Stay?
- By Johan Fantenberg, Ping Identity
- May 20, 2024
As businesses seek to increase revenues by gaining new customers and getting existing ones to buy more, they constantly search for the perfect customer experience (CX). This includes ensuring the digital experience is seamless for customers and offering secure services.
A report by IDC found that businesses in the Asia Pacific recognize the need to deliver exceptional customer experiences. Not only is this key to unlocking growth, but delightful customer experiences also ensure long-term loyalty. Unsurprisingly, the report estimates that these imperatives will drive customer experience spending to grow to USD43.8 million by 2027.
Organizations are also investing in more cutting-edge technologies, like Generative artificial intelligence (AI), to improve their customer experience. IDC predicts that 80% of CIOs will harness AI, automation and analytics by 2028 to drive agile, insight-driven digital businesses.
However, as businesses continue to perfect the customer experience, increased digitalization opens the door to more risks by expanding the attack surface. Ensuring customers are safe online will become even more difficult, especially as threats become more prevalent and sophisticated.
PwC’s Digital Trust Insights 2023 for Southeast Asia stated that 34% of Singapore organizations expect insider threats and social engineering attacks to significantly affect them. Responding to these new realities hinges on better, more robust security features grounded in the "never trust, always verify" ethos.
Passwords are a vital component of this as they play a central role in how online identities are authenticated.
Simplifying the customer experience
In developing more personalized experiences for consumers, reducing the complexity of passwords is the end goal businesses want to achieve. The proliferation of online accounts means that users have more credentials, and that is often a source of friction as people either have to remember more passwords or they potentially compromise their security by reusing the same (usually simple) password across multiple platforms—worsening the impact if their passwords are hacked.
A recent survey on brand loyalty indicates that 89% of Singaporeans have more than one password across multiple logins but that only 16% are using unique passwords for all their online activities. 73% of consumers would also switch to a brand that offers a less complicated login process. While there are no acceptable compromises around security, businesses must tap into solutions that simplify the authentication experience for customers. In fact, 60% said they stopped using the services of a brand simply because they became frustrated with the login process.
Going passwordless
Given the challenges consumers face in remembering multiple passwords, it is time businesses move towards passwordless authentication, improving security and the user experience. Passwordless authentication methods rely more on biometrics and tokens to grant access.
The Monetary Authority of Singapore (MAS) has pushed for adopting passwordless authentication methods through multi-factor authentication (MFA) for mobile banking and payments. It also appears that customers are more open to businesses holding their biometric data, with 40% of consumers noting that they fully trust organizations to manage their identity data. Meanwhile, 34% of consumers globally are open to using a passwordless login option if it is as or more secure than using a traditional password. This underscores that acceptance of passwordless authentication is gaining steam.
It is no wonder that the passwordless experience simply eliminates the need for users to remember multiple passwords. When users are not pressured or prompted to remember multiple logins and passwords, this will help lead to a positive customer experience.
Some organizations have already transitioned to passwordless authentication for their workforce. A report by Gartner predicts that more than 50% of the workforce and more than 20% of customer authentication transactions will be passwordless by 2025.
There are already a myriad of passwordless authentication options available today. Brands can choose to integrate with biometrics on mobile devices such as facial recognition systems and smart MFA solutions capable of assessing a variety of risk signals in real-time to minimize the need for the user to interact with OTP prompts, push messages, and so on.
At the end of the day, consumers want simplicity when interacting with brands online. Organizations moving towards a passwordless consumer experience need to ensure robust cybersecurity features remain in place. Only then will there be a balance in mitigating risk and providing a positive customer experience for a secure digital future.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends. Image credit: iStockphoto/ArtemisDiana
Johan Fantenberg, Ping Identity
Johan Fantenberg is the principal solutions architect for Asia Pacific & Japan at Ping Identity.