Remote biometric identity authentication (RBIA) holds the key to improving the customer experience in the online retail environment as well as in-store, while enhancing security significantly.

Statista says that online retail reached approximately $4.9 trillion in 2021, up from $4.25 trillion in the previous year. Even more startling, it forecasts e-commerce will grow by 50% over the next four years. Online retail currently accounts for 19.6% of all retail sales, a percentage that is expected to grow to 25% by 2025.

E-commerce in South Africa is lagging, but it too grew by 66% in the two years between 2018 and 2020 to R30.2 billion. The proportion of total retail sales doubled from 1.4% to 2.8% and looked set to reach 4% during 2021.

The rise of online retail has been ongoing for several years, and clearly the enforced move online prompted by COVID-19 has put wind under its wings. However, the move online has also led to a rise in cybercrime, an area in which South Africa is regrettably a leader, ranking third in the tally of the number of cybercrimes, with digital crime incidents rising by 33% in 2020. The Southern African Fraud Prevention Service found that impersonation fraud grew by 337% in 2020.

In this environment, it’s obviously critical that retailers find new ways to confirm the identity of with whom they are transacting. No wonder that RBIA is sparking the interest of retail CIOs, COOs and CFOs. RBIA uses sophisticated algorithms to compare a selfie taken on a smartphone to the biometric and other information stored on the Home Affairs National Information System (HANIS). In the background, cloud-based artificial intelligence and machine learning applications assess whether the smartphone image is of a live person; the fact that the patient may have aged does not change the essential proportions of the facial features, making identification secure.

Easy to do, with great security benefits for both parties.

But, wait, there’s more…

Security against online fraud is a powerful driver for the adoption of RBIA in retail, but there’s another compelling reasons for retailers to adopt it—and to use it in the real world as well. This reason is customer experience, or CX, which has emerged as one of the hallmarks of online retail, and one that is set to influence in-store shopping as well.

Amazon is usually cited as one of the earliest and still leading masters of CX. The premise is simple—because one has to log into the site to make purchases, it is easy to “recognise” the customer via his or her password. Over the years, Amazon and its peers have proved fairly adept at using past behaviour to recommend new purchases. Increasingly sophisticated artificial intelligence in the background is also being used to leverage customer data more broadly to identify offers or products that a specific customer might find similarly attractive. And, because payment information has been stored, payment is easy—Amazon’s “1-click payment” is remarkably slick, and the overall CX is pleasant.

Facilitating easy payment is important because many online purchases are abandoned at this point.
RBIA strengthens this whole process by authenticating identity through biometrics. After all, many people are careless with their passwords, and the media is full of reports of hacked passwords for sale on the Dark Web.

Virtual and real converge

One of the big trends in business and society is the convergence of the virtual and online worlds. Whereas once the digital world tended to mirror the real, over time we have begun to see the digital world influencing the real. This is particularly true in retail; consumers are increasingly demanding that a personalised online experience is replicated in-store.

The stakes here are high. In-person retail remains the biggest category and, in the nature of things, it is still preferable to buy many goods in person. Stores that can more nearly replicate the “concierge” experience for their customers are likely to increase loyalty and share of wallet over the long term, plus garner huge amounts of new data that can be used for product selection, store layout and the overall flow of the shopping experience. For example, a customer about whom one knows a great deal can be intelligently directed to goods he or she is likely to want, or personalised special offers can be made.

In a similar vein, such a customer could potentially benefit from frictionless payment using stored payment information to replicate “1-click” shopping in the real world. No queue, no PIN, no slip.

As you’ve doubtless guessed, there’s one significant barrier to achieving all of this and more: identifying customers accurately the moment they enter the store. One way is to offer some incentive for them to log in using their existing profile, but few will actually do this in reality. RBIA, as described above, bridges the gap, ensuring that the in-store systems can authenticate a shopper’s identity and, from that, everything else flows.