Nottingham, 19 March 2012 – Research conducted for Experian®, the global information services company, estimates that £1.02 billion worth of online shopping transactions were abandoned last year by UK consumers frustrated by old and inefficient identity measures. One in five of these abandoned transactions were not taken elsewhere as individuals cancelled their shopping attempt altogether, resulting in £214 million worth of net lost revenue for UK retailers.
The study, which was conducted for Experian by the International Fraud Prevention Research Centre and included survey data as well as insights from online retailers and the Office of National Statistics, revealed that 44 per cent of UK shoppers have abandoned at least one online shopping transaction in the last year having become frustrated with the length and complexity of certain older forms of identity verification.
Older forms of online identity verification, typically complex, standalone systems drawing on single sources of information to corroborate identity information, are unable to validate as many individuals electronically as modern services. As a result, genuine customers might be forced to call a contact centre, submit physical documents through the post or visit the store or branch to confirm identity. Alternatively, the organisation might choose to accept a lower level of proof, and risk higher levels of fraud, in order to minimise customer inconvenience.
Nick Mothershaw, UK Director of Identity & Fraud at Experian, comments: “The UK’s lost billions from inefficient online identity and security measures is a price that doesn’t have to be paid given that technology now enables incredibly robust identity checks to be undertaken almost instantaneously.
“Older forms of identity verification – which draw on limited information or out-of-date data, cannot instantly validate as many genuine customers, and don’t provide extra assurance from interactive questioning or the checking of previous identity fraud intelligence – require organisations using them to prioritise security or customer convenience.
“Those using less efficient identity checks can benefit significantly by upgrading to newer tools, which enable improvements in security levels and faster, less onerous checks.”
Professor Paul Barnes, Director of the International Fraud Prevention Research Centre, commented: “Depending on the reason for the identity verification check, our tolerance during a transaction varies greatly – and can be as short as a 60 second window. With millions potentially being lost from the key industries in the UK, it is vital that this issue is addressed as soon as possible.”
For further information Experian please contact:
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The analysis detailed in this press release was conducted for Experian by The International Fraud Prevention Research Centre. It combined insights from an Opinium Research survey of 2,028 consumers and organisations across a range of sectors to estimate the proportion of transactions that are abandoned or incorrectly rejected. By considering this alongside Office of National Statistics information on the size and value of a range of sectors it was able to calculate the associated financial losses.
The total value of internet retailing transactions abandoned due to identity impatience (£1.02bn) was calculated by multiplying the total value of internet retail sales (£27.4bn – ONS figure) with the percentage of transactions abandoned due to frustration with the length of identity measures (3.714% - figure determined by proprietary Experian consumer research). The value of transactions that were not subsequently taken elsewhere (£214m) was calculated by multiplying £1.02bn by the proportion of abandoned transactions not subsequently taken elsewhere (21% - figure determined by proprietary Experian consumer research).
Experian is the leading global information services company, providing data and analytical tools to clients in more than 80 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2011 was US$4.2 billion. Experian employs approximately 15,000 people in 41 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.
For more information, visit http://www.experianplc.com .