The Growing Significance of Trusted Digital Identities in the U.S. Financial Services
4 November 2022
I am very pleased to share a new report that has just been released by Oliver Wyman, Celent's parent company: The Growing Significance of Trusted Digital Identities in the U.S. Financial Services. The report has been written by Oliver Wyman in collaboration with the American Bankers Association, and I am proud to have contributed as well.
As Celent clients know, strengthening digital identities is critical for reducing fraud, complying with regulatory requirements and establishing trusted relationships with customers. Further, customers expect the identity proofing process to be frictionless and failure to meet this expectation could lead to lost market share to companies with an easier user experience. However, for a Financial Services institution looking to invest in its customer identity capabilities, it can feel as though there are many moving pieces.
This report seeks to demystify the topic of digital identity by outlining the three customer-facing processes that rely most on trusted customers’ identities, explores the cost for Financial Services institutions of not investing in these capabilities, and maps the vendor market and the forces that are shaping this ecosystem. Understanding the latter is particularly important: Financial Services trends in faster payments, the different roles played by both the U.S. government and private sector, evolution in underlying technologies, and competitive dynamics in the vendor landscape are all impacting the ecosystem. Regulators are also increasingly pushing for innovation in this space; the recent FDIC Tech Sprint on measuring the effectiveness of digital identity proofing in Financial Services is a prime example of this. Therefore, any bank seeking to upgrade its digital identity processes and controls first needs to understand these broader trends and how they might reshape the ecosystem and vendors; and then seek solutions that will have long-term relevance.
Finally, we close with a set of actions that Financial Services institutions across the U.S. can take today. Among those is a recommendation to undertake a maturity assessment using Celent's online tool in order to benchmark your organization against peers and industry best practice and to establish the baseline.
I believe the report will be a helpful guidance to banks and credit unions in the US wishing to improve how they manage customer identity and authentication. Of course, if you have any questions or would like to discuss your specific situation, do not hesitate to reach out!