Why identity management is an essential investment for Australian financial services providers in 2025

Is making it ever-more-simple for consumers and business customers to engage with you digitally an ongoing objective? For financial services providers of every description, the answer is more than likely a resounding yes.

That's to be expected, given the well documented benefits such a strategy can deliver. Chief among those benefits is meeting and exceeding customers' expectations. 

In today's times, swift and seamless online transactions, a gamut of self-service options and a friction-free customer experience have ceased to be 'nice to haves'. With Australians now conducting 99.1 per cent of their banking transactions digitally, according to latest research from the Australian Banking Association, they're now absolute essentials.

Financial services providers that don't have them sorted risk being perceived as outdated, difficult to deal with and even unprofessional – hardly the image any dynamic, future focused organisation is seeking to convey.

Trust down, worry up

But while customers may be enamoured with the speed and convenience that come standard when they deal with you digitally, they're no longer feeling as relaxed and comfortable about logging on and attending to their affairs as once they were.

That's hardly surprising, given the stream of well resourced, household name organisations that have fallen prey to hackers and cyber criminals in recent years. Consumers have seen trusted tech and utilities companies experience attacks, resulting in the personal information of millions of customers being stolen and sold on the dark web. And it's got them worried. 

In the wake of these incidents, concerns about identity theft and fraud have become well- nigh universal. Some 87 percent of people now feel highly or somewhat concerned about the prospect of falling victim, according to a recent global consumer survey. That's an increase of 24 per cent on the previous year's figures.

The seemingly inexorable rise of AI is doing little to allay those concerns. We've all seen, read and heard about deep fake technology and the increasing ingenuity of bad actors bent on deceiving and defrauding. That's got a whopping 89 percent of us worried about how this game changing technology might impact the security of our personal identities.

In Australia, those concerns are greatest when we're shopping online and accessing digital banking services.

Upping the protection factor

Against that backdrop, it's incumbent upon institutions that want consumers and businesses to engage with them digitally to ensure security, ease of use and privacy are incorporated into every customer experience they offer.

Introducing greater rigour into the authentication process is an effective way to do so. Whether it comes in the form of multi-factor authentication, biometrics, voice recognition, QR codes, or text and email prompts with one-time log-ins, financial services customers want the reassurance that only robust verification measures can provide.

Requiring them to prove their identity before proceeding with a transaction or interaction signals that your organisation is serious about safeguarding its network and the integrity of their personal and financial data. 

So does the adoption of a suite of passive data security measures, such as firewalls, encryption and antivirus programs, all of which can be implemented without adding friction to the customer experience.

It's good to talk

Smart financial services providers will put these protective measures in place and ensure they stay abreast of new developments in the rapidly evolving identity management space – think digital wallets and decentralised identity technology that's enabling governments to roll out mobile and digital driving licences. 

Smarter ones will talk about what they're doing and why. Communicating clearly, in everyday language your customers can understand, is a great way to relieve their fears about identity theft and fraud and provide reassurance that safeguarding their personal information is a priority for your institution. 

A more secure future, customers can bank on

In today's times, an outstanding digital experience is one that's swift, seamless – and safe. It's what Australian consumers and businesses expect and demand when they transact online. Financial services providers that fail to provide it may quickly find themselves bypassed, in favour of competitors that are prepared to invest in platforms and programs that deliver robust protection for customers' identity data. 

If you're serious about ensuring your customers feel supported and safe every time they engage with you, it's foundation technology that should sit at the heart of your ICT stack.