It must be a tough time for the-sky-is-falling type of people, or even just the mildly pessimistic. Seemingly endless news of data breaches and cyberattacks — to say nothing of experiencing them personally — can make even the most tech-welcoming consumer think about retreating to someplace beyond the grid.
Businesses and other organizations hoping to profit from the expanding digital economy find ways to maintain and even deepen consumer trust in their security efforts. Increasing collaboration promises to help with that task, according to a recent PYMNTS interview with Director of Compliance and Interoperability Kevin Emery at UL, which helps other companies with identity management and security-related issues.
The ongoing consumer adoption of connected devices, from smartphones to appliances that are part of the emerging Internet of Things (IoT), is bringing security issues into sharper focus for all participants in digital financial services, eCommerce and associated areas, Emery said.
More Connections, More Risk
All those connected devices will, by 2025, represent an estimated $6.2 trillion global industry, Emery said. As those devices communicate more efficiently with each other, and enable a range of commerce- and payment-related tasks (such as personalized advertising, anticipating retail purchases, automated ordering and bill settlements), the security risks will evolve and grow.
“The key is to ensure that all devices are secure,” Emery said. “Having a complete and ongoing end-to-end security solution is critical.”
That may sound obvious, but it belies the sustained effort required to reach that ideal. A world that becomes increasingly interconnected is a world with all kinds of moving parts, and that means an ever-shifting roster of technology, payments and commerce providers — many of which work according to different regulatory and industry standards.
The future will necessitate “much more of a collaborative approach,” he said. “There needs to be more collaboration across different organizations.”
A look at the financial services industry underscores the importance of that collaboration when it comes to security. UL found that 70 percent of millennial consumers — who are, after all, headed toward their peak earning years — believe that, within five years, “the way we pay for things will be [totally] different.” They also expect that innovation in financial services will come largely from outside the traditional industry, with tech startups overhauling the way banks work.
That equates to new players, fresh ideas and the need for a cooperation among disparate players toward a common goal: winning and keeping the trust of consumers so they don’t flee to competitors. And make no mistake, those younger consumers are willing to abandon technology and companies that fail to do their proper jobs. According to UL, 76 percent of millennials said they “are always looking to try new and different forms of banking, saving, payment and currency.”
Cryptocurrencies will also play a role in consumer trust and collaborative fuel.
“With so much of cryptos shrouded in secrecy, security risks are at an all-time high: No wonder financial regulators are struggling to define their stance,” UL said in a recent eBook entitled “Smart World: Smarter Customers,” giving a general overview of some work on those security efforts.
According to Emery, consumers are rational bunch and are willing to make reasonable trade-offs with the organizations that accumulate, analyze and use online payments and commerce data.
“Consumers are willing to trade privacy for convenience under one key condition: trust,” he said.
There seems to be little doubt that he is right — getting off the grid is extremely hard work, after all. However, it’s also all but certain that all those breaches and hacks are forcing consumers to think more deeply about that trade. Organizations that find better ways to collaborate may end up with an edge.
To download the “Smart Word: Smarter Consumers” eBook, please fill out the form below: