New Hong Kong Study Finds Smooth Digital Transactions “Essential to Business Survival” During and After Pandemic

A new global and Hong Kong study by the Economist Intelligence Unit for TransUnion (NYSE: TRU) has overwhelmingly found the key to whether or not companies go out of business hinges on providing consumers friction-right digital transactions. 83% of Hong Kong and 85% of global executives surveyed as part of the study said they believe smooth transactions are “essential to business survival” rather than merely a competitive edge.

“COVID-19 has dramatically accelerated digital transformation with 53% of our survey respondents in Hong Kong saying their organization has changed their digital transaction process due to the pandemic,” said Shai Cohen, senior vice president of Global Fraud Solutions at TransUnion. “But all of this digital progress will be wiped out if we can’t remove these barriers to building bilateral digital trust. For instance, nearly two-thirds of global executives in the study who said their company changed their digital transaction process as a result of the pandemic experienced glitches."

The report, “New Dimensions of Change: Building Trust in a Digital Consumer Landscape," included responses from 120 executives from Hong Kong, and 1,490 executives in Brazil, Canada, Chile, China, Colombia, the Dominican Republic, India, the Philippines, South Africa, the U.K. and the U.S. The research uncovered how technologies like artificial intelligence (AI), national digital IDs^[1] and super-apps^[2] can help overcome hurdles and possibly create new challenges to building digital trust.

Artificial Intelligence (AI), Biometrics and National Digital IDs Will Play an Increasingly Important Role in Fraud Prevention

Overwhelmingly respondents answered that: 1) biometrics^[3] will be the dominant payment customer authentication method; 2) improved fraud detection and security is the greatest benefit to using AI; and 3) a national digital ID system will help prevent consumer fraud.

Approximately 90% of Hong Kong and 85% of global executives say biometrics are likely to be used to authenticate the vast majority of payments in the next 10 years. About 39% of Hong Kong and 43% of global respondents noted that improved fraud detection and security is the greatest benefit to using AI. This was the top selection by far with smoother customer experience being the second most used answer globally at 29% worldwide and 33% in Hong Kong. Furthermore, the vast majority of executives, 73% in Hong Kong and 79% globally, think national digital IDs will help fraud prevention in consumer transactions.

“Ensuring consumer trust starts with preventing fraud. Our global research overwhelmingly showed that biometrics, AI and national digital IDs aren’t just a fad for consumer fraud prevention. They are key for trusted commerce for the foreseeable future,” said Marie Claire Lim Moore, CEO, Hong Kong, TransUnion. “Looking ahead, companies in Hong Kong must understand the long-term trends and innovations affecting security, privacy and fraud, in order to successfully balance optimal customer experience with rigorous security and fraud prevention.”

National Digital IDs Hold the Key to Economic Inclusion

Seven in 10 executives globally and 69% in Hong Kong believe a national digital ID gives low-income groups access to consumer services they would have previously been excluded from. By industry worldwide, respondents from consumer lending and telecommunications think such IDs give lower-income groups access to services they might otherwise lack. Both industries have led the way over the last decade in reaching the community of financially-underserved customers, manifested in innovations like microfinance and mobile money. Although it is a relatively low percentage, survey executives in Hong Kong (21%) more often claim consumers feel there is no clear need for a national digital ID compared with 15% of global executives.

Executives Believe Consumers are Comfortable Sharing Personal Data

About 80% of Hong Kong and 73% of global executives believe consumers are comfortable sharing personal data with private companies. Approximately 78% of Hong Kong executives believe consumers are comfortable sharing personal data with governments, which is higher than the global average of 71%.

“Technological innovations like AI, biometrics and national digital IDs paired with proven fraud prevention methods like device intelligence can provide a more convenient and inclusive way for consumers to transact that still protects security and privacy,” Lim Moore concluded.

For the survey findings and registration information for a Dec. 8 webinar about the study, go to the Hong Kong report website.

_{^[1] National digital ID initiatives are government-administered programs to provide a digital identity to residents, often using biometric data to authenticate identity.}

_{^[2] Super-apps are single digital portals, predominantly accessed via smartphones, through which customers access and pay for third-party products and services.}

_{^[3] Biometrics are defined as fingerprint, facial recognition or voice authentication methods.}