Does trust have a value? Or is it an intangible glue holding relationships together? Maybe, it’s a bit of both.
The economy of trust has a value, at least as calculated by a senior economist from the World Bank. Trust accounts for as much as 99 percent of the value of the United States GDP, and in dollar terms, that is about $17 trillion. A corollary here might be that some economies do not grow because they have, in fact, lost that economy of trust.
So it is with business, too. A firm with wary customers soon has no customers if that entity is deemed untrustworthy. Consumers vote with their feet as much as their pocketbooks.
In an interview with Karen Webster, Ray Wizbowski, CMO of Entrust Datacard, weighed in on the weighty matter of trust between financial institutions and the people who use them (or don’t).
New technologies can serve to enhance the trust economy, said Wizbowski, “and when you start looking at technologies that are in play today, there are technologies that are really focused on delivering value to the customer, and there are technologies that are focused on delivering value to the financial institutions. So, the technologies, for example, create more efficient processes.”
“When you are talking about bolstering the economy of trust, it has to come back to where banks have traditionally played,” he continued. “Right now, they are facilitating transactions between two parties or two entities and doing that in a trustworthy way, whether that’s a wire transfer or some other exchange of value … For a long time, that has been a credit, which is a little bit of a broader way for the financial institution to interact with the customer in real time” with, as an example, push notifications.
And as banks take stock and think about how to bring that trust framework to the customer, there’s been the emergence of chip cards with operating systems housed in those cards that can be leveraged into the mobile environment or digital realm (such as branchless banks that exist solely online), noted Wizbowski. The upshot is that the consumer gains some control over identity, and the firms themselves need to employ robust identity verification processes. Technology has enabled the issuance of a digital certificate that represents a consumer in a digital transaction (which, in turn, can be downloaded into a mobile device and used along with a PIN).
But technology aside, absent the aforementioned level of trust, he said, the whole system breaks down. He posited that there has been no wholesale migration to cryptocurrencies because there is no real basis of trust and no recourse if something goes wrong. In that case, Wizbowski said, “you are out of your money. It’s gone … There has to be identity … even through a private exchange, for example.”
And eventually, he added, there may be a place for identity brokering as part of services offered by financial institutions. Consumer acceptance of identity brokering would be a longer-term occurrence that individuals would have to come to grips with in terms of trusting one firm with all of the data that makes up the identity itself.
Trust issues are going to “become more pronounced as IoT comes into play, as devices talk to other devices … How are you regulating what gets shared between devices?” Wizbowski said.
In one example, he offered the scenario of a customer walking into a bank, having an iBeacon verify their identity through their mobile device and pulling up account information, and then, the teller is at the ready with the account info — plus relevant offers for cross-selling purposes during that transaction. Thus, the questions get raised as to where, when and how much data is shared, which also means that consumers should be empowered to control the answers to those questions.
The financial industry has to take into account literacy over standards levels or, at the consortium level, just what constitutes a secure identity. Once that dialogue is established, the stage may be set for “consumers who are longing to set their own policy as to how their identity gets used as a control guide,” offering, in essence, a checklist of data they will allow to be shared (or not), even on a conditional basis, said Wizbowski.