Traditional customer authentication approaches can create conflict and friction in the customer experience. With Consumer Duty regulations zooming in on customer outcomes, we need to balance fighting fraud with customer experience.
The following is based on excerpts from a recent Contact Centre Management Association (CCMA) report.
The CCMA report, “Balancing the Fight Against Fraud with Customer Experience,” found that the increased need to question genuine customers during authentication can create conflicts for frontline contact centre agents and unwarranted friction for callers.
The increasing prevalence of first-party fraud, often initiated by authentic customers entangled in scams, necessitates a greater focus on detecting suspicious behaviour. This puts pressure on contact centre frontline agents to recognise issues and, if necessary, raise the alarm. And it introduces a communication and cultural dilemma for a typical customer service agent, whose training emphasises building rapport with customers and handling calls swiftly rather than challenging them.
Report contributor Nick Edge, Head of Fraud Technology at Likewize believes these conversations are better handled by the fraud team. “ Because we work in a [fraud] department where we’re effectively calling people out and challenging them, we can be a little bit more authoritative than our contact centre colleagues. [It’s not] fair on the other [contact centre] advisors to have those challenging conversations because it puts them in an awkward position.”
Ben Lyons, Vice President, Banking Operations at Chase UK agrees we need a new approach that recognises the need for increased security as well as the impact on customers.
“ We’ve spent years training our frontline teams to take ownership of the customer and go the extra mile. It was all about fast resolution’, he says in the report. “As fraudsters become more sophisticated, you have to design processes differently (for example with secondary reviews). This creates a new challenge in regard to building brand sentiment for frontline colleagues, when we build processes where more and more has to be checked and this can take longer for customers.” –
Even in straightforward cases, the need to handle authentication not only adds to handling times but to the cognitive load experienced by the front line. This represents a powerful use case for automation.
Getting the balance right
The trade-off between security and friction is a delicate one. Too much friction annoys customers and leads to complaints both directly to the provider and posted on social media, affecting the provider’s reputation.
One of the most obvious types of friction that consumers experience is the need to remember and enter passwords. More than one in four consumers (27%) in CCMA’s survey reported having been locked out of an account in the past month alone, due to a password problem.
One of the most widely-recommended steps for consumers to help secure their accounts is to adopt multiple passwords. Yet, despite reminders to do so being built into many account-opening journeys, the report found that behaviours have remained largely unchanged since 2022. And younger people tend to use fewer passwords, which suggests they are especially intolerant of friction. This underscores how difficult it is to convince people to accept friction.
Friction is in the spotlight thanks to Consumer Duty
The introduction of Consumer Duty regulations by the Financial Conduct Authority has placed the concept of friction [in customer experience] front and centre and has inspired in many organisations a wholesale re-engineering of processes and journeys. A key focus of this is the elimination of ‘sludge practices’, which are described as ‘an excessive friction that hinders consumers from making decisions in their interests’.
This promises to be a hugely positive step forward for customers. However, organisations must still be mindful of the difference between sludge practices and necessary friction.
Report contributor Sean Gilholme, Head of Customer Service at Atom Bank reminds us: “ There’s a danger of getting hooked on the removal of sludge practices. You remove all of the friction thinking you’re doing the right thing. Focusing so much on making it too easy that you neglect the other side.”
The responsibility for fraud protection is a shared commitment throughout an organisation. Contact centre teams typically focus on enhancing customer experience, while IT and compliance teams lean towards ensuring security. Achieving a successful compromise necessitates alignment from the beginning. Technology will play a crucial role in enabling organisations to accomplish this goal.
Jon Bowen, Director of Operations at Paymentshield & Lloyd Latchford explains in the report how technology supports the delivery of these kinds of regulatory requirements: “ Consumer Duty is putting a much greater onus on the ability to prove that you’re doing what you’re doing through the data and the analytics that you undertake. And I think a positive unintended consequence of that is as businesses invest more heavily in analytic capability, it becomes easier to identify patterns and therefore take proactive actions,” he says.
And Chase UK’s Ben Lyons considers how AI can be employed to support contact centre teams. “ Adopting AI will always be a two-pronged approach’, he says. “Speech analytics picks up on intent, language, tone, pace, volume. But to generate the right conversational conditions that speech analytics can pull on, you’ve got to have the right conversation in the first place. Technology will always just augment how good your people are.”
The answer is always a balance. To find out more, read the report.
