Millennials Want Companies to Adopt New Identity Verification Approaches

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When it comes to sharing personal information, millennials are extremely reluctant. There is a gap between millennials wanting to secure access on all connected devices and their willingness to sharing data, according to a study by Lexis Nexis Risk Solutions.

This is a wake-up call for businesses to find solutions that minimize the amount of data they have to collect.

“The general discomfort millennials are expressing with information sharing, beyond a couple of the most basic data points, shines a light on the need to educate this major and growing portion of the consumer population,” said Kimberly Little Sutherland, Senior Director of Fraud Management for Lexis Nexis Solutions. “Likewise, it begs the question, are retailers and financial institutions optimizing their business processes for the millennial customer?”

Globally, millennials have exhibited similar tendencies in their use of payment methods and digital equipment as well as their attitudes toward information and security measures. They seem to have the same basic needs as other demographic segments but are more vocal about what they want and expect.

The Lexis Nexis study found that U.S. millennials not only have and use digital devices often, but use them for a broad variety of purposes. Friction intolerance over the sharing of personal information is another area of commonality across markets, although Malaysian, Mexican and Brazilian millennials are the most sensitive and averse.

Smartphones are almost ubiquitous among millennials, with 97% usage across all markets. In the U.S. they use them for mobile banking but not as much for purchases. Two-thirds of U.S. millennials are worried about identity theft and data breaches; their global counterparts are more concerned (75%).

“To mitigate risk and balance consumer expectations, companies looking to enhance the customer experience and improve friction must learn to ask for only the data they need,” said Sutherland. “Many companies are asking for information required by their existing technology systems that is not actually needed in their workflow. For example, some companies in the U.S. ask for social security numbers when their businesses don’t actually require this information.”

Sutherland said many companies are working with systems that have redundancies and backup plans built in when in reality they should have stronger primary identity verification. This would reduce their reliance on more intrusive secondary verification processes that ask for supplemental or unnecessary data. It would also reduce friction and thereby improve the customer experience.

The study found U.S. millennials are more likely to use debit cards than their global counterparts. Their low tolerance for friction, like having to share personal information to open a bank account, ranks them among the most impatient in the world, along with their German counterparts.

Distrust of retailers, communications companies and payment providers is sizable, the study found, with variance by country. More than a quarter of millennials globally said they have no trust that retailers or mobile wallet companies will handle their personal information correctly or securely. Financial institutions fared somewhat better, with 13% reporting no trust in them.

“The study findings show a significant disconnect between the concerns of millennials and the information businesses need to ensure financial transparency,” said Thomas C. Brown, Senior Vice President, U.S. Commercial Markets and Global Market Development, Lexis Nexis Solutions. “Consumers want to know that they’re protected from potential identity fraud, which banks and other companies can only provide if they have access to enough and the right kind of data to detect financial crime and bad actors within the systems.”

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