Cryptocurrency companies need to improve security, but not at the expense of equally important user experience
Consumers around the world are becoming increasingly used to the slick interfaces offered by the likes of Netflix, Amazon and Spotify. It may be undeniable that the technologies supporting these platforms are innovative, but without such a smooth user experience on each, it’s unlikely they would have reached such widespread adoption or prevailed over competitors. As cryptocurrency moves closer to a tipping point, more work needs to be done to improve usability, at the same time as maintaining a robust security system.
In the early days of cryptocurrency, investors who believed in its power were willing to make the effort to understand this potentially groundbreaking digital asset. “At its inception, the cryptocurrency interfaces were probably a minor annoyance to overcome, however this becomes far more important as they hit the mainstream,” says Alisdair Faulkner, chief products officer at security technology firm ThreatMetrix. “As with any industry, the exchanges that flourish will be the ones offering the best online experience and the easiest authentication process, all without compromising user safety and security.”
The exchanges that flourish will be the ones offering the best online experience and the easiest authentication process, all without compromising user safety and security
New crypto investors expecting the same user experience as traditional platforms
Retail cryptocurrency investors and traders have a different set of expectations than experienced crypto investors. Newer investors expect the platforms they use to purchase digital currencies to offer a similar level of simplicity, security and speed as traditional payment solutions from banks. Yet traditional financial institutions have had decades to perfect their payment platforms to meet regulations, whereas the vast majority of cryptocurrency platforms and exchanges are only a few years old and have little experience of dealing with often complex regulations.
“Right now, the biggest problem is that companies in the cryptocurrency space are new to the whole work of KYC (know-your-customer) verification. There are no quick passes around the regulatory structure that is in place today for KYC and anti-money-laundering rules. This puts firms that already have verified customer relationships in a position of key advantage,” says Paul Brody, EY global innovation blockchain leader.
Many crypto companies are just beginning to put procedures in place to meet essential regulations across different jurisdictions. However, due to the volatile nature of some cryptocurrencies, there is a limit to what digital currency platforms can do to make the purchasing process easier, until a more comprehensive framework is created by government. For example, exchanges have no power to change the decision by major UK, Australian and US banks to ban investors from buying cryptocurrencies on their credit cards.
Shifting the security burden away from the user
As the crypto ecosystem continues to mature, it’s increasingly clear that sophisticated technological tools are necessary to shift the security burden away from the user. Moving away from a reactive security framework towards a proactive approach, where companies utilise all available data to gain better insights into potentially fraudulent behaviour, is the next step for the industry. By implementing practically real-time analytics solutions, companies will have the power to identify malicious actors, without undermining the user experience.
“Organisations are now embracing the latest technology innovations that assess digital identity based upon the historical behaviour of a user, as seen across multiple websites and apps. This is done in a way that is completely behind the scenes and asks for no additional steps from a user,” says Mr Faulkner.
For this method to be successful, he says, every phase of the customer journey, from account creation, log-in to purchasing, must be monitored to ensure all relevant data is collected and a consistent decision-making process is followed.
Humans and technology both needed for best possible user experience
The use of technology is only a single part of the strategy needed by cryptocurrency firms to balance user protections and usability more effectively, with efficient staff who are able to process applications quickly and accurately being equally important. Digital currency exchange Coinbase is one of the most established platforms in the industry and has seen first hand how crucial the human element is in creating a smooth user experience, especially at a time of unprecedented growth in the cryptocurrency ecosystem.
“As part of that surge, consumer demand for Coinbase increased 40 times and we experienced transaction volumes in November and December last year that grew by 295 per cent,” says Zeeshan Feroz, UK chief executive of Coinbase. “We now have over 600 support agents working on our queues across three different locations and we offer phone support 24 hours a day, seven days a week.”
As with any new technology, it is vital that the user experience facilitates adoption. Users are already on a steep learning curve when they first decide to engage with cryptocurrency and a bad user experience can put them off for months
In some cases, human judgment will be required to process verification requests and to determine what transactions may be problematic. By increasing the support team, Coinbase has been able to resolve customer issues faster and reduced the backlog that had built up by 95 per cent.
Reconciling customer needs with security requirements will be a continual process for cryptocurrency firms. From adopting the payment industry PCI-DSS certification standard for incorporating biometrics, two-factor authentication and device confirmation, digital currency platforms can help enhance usability without placing complex barriers in front of the user.
“As with any new technology, it is vital that the user experience facilitates adoption. Users are already on a steep learning curve when they first decide to engage with cryptocurrency and a bad user experience can put them off for months or give them a negative perception of a brand. Getting the user experience right should be a key focus of all service providers,” concludes Pavel Matveev, chief executive and co-founder of cryptocurrency wallet provider Wirex.