To Earn Customer Trust, Rethink Digital Identity

Welcome to the new world of trust. Identity is the new currency, and the costs of mishandling it – or making it easy to steal – can end up higher than the mere theft of funds.

That’s one of the insights offered by Tony Ball, senior vice president and general manager of identity and access management for Entrust Datacard, during an interview with Karen Webster for the PYMNTS “Economy of Trust” podcast series. The two had a wide-ranging discussion about how to establish trust in a world that is becoming ever more mobile and digital.

The concept of trust in the worlds of finance and retail still depends on generational outlooks and human behavior, Ball said. “It comes down to the proclivity for taking risks,” he said, adding that some people are predisposed to trust, while others tend to not trust anyone or anything.

Younger consumers handle much of their commerce and funds management via smartphones, often oblivious or unconcerned about the prospect of thieves stealing and exploiting the virtually endless rows of personal data stored in digital warehouses — some of which, as the news proves regularly, lack sufficient safeguards. On the other hand, it’s not difficult to find examples of older consumers — baby boomers, for instance, or their elders — who might use some digital channels but still prefer to visit their local bank branches and engage with trusted tellers and managers.

Those generational divides require focus from retailers and financial services providers so they can craft services that appeal to the broadest set of consumers. And don’t think that building a sense of trust is about enlightening the older folks, either.

“I look at my son, who’s in his early 20s,” Ball said, adding that like most young people, his son is all about digital commerce — yet he’s only an amateur when it comes to the larger questions of digital data security. “He carries zero cash, and I’ve had to educate him about the risks.”

That risk involves data, and data functions as a double-edged sword as mobile and other digital channels gain more popularity with shoppers and bank customers. The more data a company gathers from a consumer’s web searches and transactions — type and time of purchase, for instance, or delivery preferences — the better that organization can anticipate future needs and provide services without requiring as much time or hassle. In short, the surrender of more personal data online leads to more convenience. That is among the main trade-offs of modern life.

“Once you start on that journey of giving up that information, that information is ending up in the hands of people who predominantly use it for good,” Ball told Webster. “The only time it becomes a problem is in a breach, when someone is taking (the information) out of context” and using it for purposes of criminality, not convenience.

“That’s when it starts to get scary,” he said.

Part of the defense against that — part of a wider trust-building effort — is having clear eyes about the scope of the data relationship.

The older generations remain “very reticent to give up information unless it’s very necessary,” Ball said. Younger consumers, meanwhile, are “essentially giving away” their data.

Ball questioned if those younger consumers really grasped their role in that process. “Perhaps they don’t understand the responsibility they have in safeguarding the things they don’t want to find in somebody’s hands.”

For Ball, such uncertainties about younger consumers translate into a duty for the payments industry as it continues to work through issues of trust in this digital age. “We have to educate people,” he said.

Even so, one could reasonably argue that for many digitally enthused consumers, the concept of security and data protection leaves them feeling numb or simply bored. For instance, a March poll from Reuters and Ipsos, taken in the wake of Cambridge Analytica’s misuse of Facebook data, found that 41 percent of U.S. consumers trusted Facebook — a rate significantly lower than the trust expressed for the likes of Amazon, Google or even Yahoo.

Yet those consumers have hardly backed away from Facebook. Reuters/Ipsos also found that 51 percent of survey respondents check the social media platform “continuously throughout the day,” and that 78 percent check Facebook at least once per week.

Such sustained loyalty does not seem possible if one were to replace Facebook with a financial institution and users were facing the loss of funds and the necessary paperwork to regain those funds from banks. But that speaks to the point of trust in a digital and mobile world, Ball said. In a way, identity is a new currency, and because a criminal can do so much with a half dozen or so personal data points, consumers – encouraged by financial services providers and retailers – need to adopt that new way of thinking.

“We are not even educated about how information can be used when there is a breach,” Ball said. And a breach of personal data “will have much greater impact than a transaction that comes out of your bank account.”

Identity no longer exists as a set of “static attributes,” he noted. Instead, identity is dynamic. “You have to think about that continuously,” Ball said. “You’ve got to be looking at ways of ensuring that the dynamic element is something that evolves with each transaction. You have to think about how you ensure that identity continues to be authenticated in a continuous manner.”

Doing so requires striking the right balance. Organizations must figure out how to protect consumer data without introducing too much “friction” into the process, he said, a mistake that can make consumers impatient and frustrated.

“These things cannot be done alone,” Ball said. “You need to understand what you are trying to solve, you need to do it seamlessly and you need a partner to help you address the (requirements) you have.”