Social authentication – “Bring Your Own Identity” and digital banking
A new trend, known as “Bring Your Own Identity” or BYOI, allows social media sites such as Facebook or Amazon to manage peoples passwords.
The average Brit has over 26 online accounts, according to credit checking company Experian. Remembering separate log in details for all of these is reserved for the most skilled Vegas card counters. However, a new trend, known as “Bring Your Own Identity” or BYOI, removes this issue. It’s a relatively new digital authentication method where someone’s username and password is managed by a third party such as Facebook, Twitter, Amazon or PayPal, so people can log in to other websites quickly using these existing accounts.
Many websites are already seeing the benefits of this system. It’s particularly popular with online shops as it reduces the need for customers to create and remember account details for every website. Previously, this lengthy process led to registration fatigue and abandoned transactions.
So, what does it mean for digital banking? Our recent research reveals digital banking users also get frustrated by tedious log in and registration processes. Over a quarter say they spend over two hours a month logging in to their online banking and 44% are annoyed they have to enter multiple passwords just to check their bank balance. Introducing BYOI would dramatically reduce this lengthy log in process and eliminate the need for customers to remember several different password or numbers. It also means they could access their various bank accounts using just one ID.
BYOI could also encourage greater mobile banking adoption. According to The Ponemon Institute, a security research company, mobile has been the driving force behind BYOI so far, as it’s an easier way to create new accounts and log in on a smaller screen size. By introducing BYOI to mobile banking, customers would be able to check their smartphone balance with one simple click. It would also make the process of installing and setting up digital banking apps much simpler.
Sceptics of BYOI cite privacy and loss of control as its main problems. However, using a reputable cloud service provider is more secure than spreading and saving passwords in many different places online. Secure websites such as Facebook or YouTube do not store password information (hence why they send password reset links rather than your actual password). Facebook and Google also both use forward secrecy, an extremely tough encryption method many other web services still don’t use. Plus, no website forces users into BYOI, it is simply an option, allowing people to choose which website they hold unique log in details for. Moreover, for more complex or sensitive digital banking activity, banks would be able to incorporate an additional layer of authentication.
Given the clear benefits BYOI already delivers for shoppers and online retailers, it’s exciting to consider its impact on digital banking. So, which financial services provider will be the first to get on board and offer a BYOI log in?