Some see compliance as a barrier. And this perceived ‘challenge’ of compliance – the need to treat customers fairly and always help, respect and protect their interests – can mean some are held back by the fear of getting it wrong. How do we overcome that?
Regulation is purely a foundation that can be built from to achieve trust and excellence. While it may be a perceived barrier (we can see from our Global Fraud Research how most businesses intend on investing in analytics purely for compliance, rather than growth), if you look at the framework and overlay it to your business strategy – it can provide a pretty good skeleton for you.
In fraud, specifically, our research shows how some businesses are softening fraud controls to prevent friction occurring in the customer experience. We can see how only a third are ready and prepared for the General Data Protection Regulation (GDPR) that will transition Europe (with the UK adopting the Privacy Bill) into a new modern data protection regulation. We can also see that of the top three reasons businesses are investing in analytics is to fulfil regulatory needs – specifically auditing and enhancing controls and checks – which are necessary for compliance.
Regulation, in our view, is a force for good. And if you look at a few of the most topical at present you can see that:
- The GDPR is outlining a process for data management that for a long time many have strived towards achieving anyway. Better transparency, data connectivity, better outcomes from data and better customer engagement.
- Open Banking opens up transactional data that was until recently limited to the holding bank. This rich information can now mean decisions are made to a much higher standard and with a much better degree of visibility around what a customer can afford – and what products best suit them. Again, something many have strived to achieve for years through technology developments.
- PSD2 introduces a clearly defined regulated approach to tackling fraud for online payments. This will make e-commerce more secure and robust. It will also drive payments providers to introduce new ways to securely authorise payments and data release. We expect to see a biometrics arms race over the next few years because of this.
- Anti-Money Laundering regulation outlines clear steps businesses need to take to ensure that they really know who they are doing business with and that they have a clear understanding of what risks they are taking on board. Again, something many strive toward daily to reduce unnecessary risks. Here again, the bottom line is the same common objective – know who you are dealing with each time.
Regulations, good businesses practices and personalisation can all help build trust. And trust is probably the one thing that is going to make or break loyalty, brand and growth moving forwards. So how do we move to a place where businesses are trusted?
To build trust, more secure data exchanges are needed. I believe it starts with identity. As we have the ability to verify people using different sources of data – using their device, using more broad data sources – we move to a more modern process.
There are, of course, complexities that sit behind digital identities. The average person on the street wouldn’t be expected to understand it. There is a lot of education to be done around helping customers understand the impact of giving their information to a third-party provider. But for Millennials, this won’t be new. It will be the norm. Most Millennials don’t hold a paper account, and therefore are fully embroiled in the digital economy. With this group, they are predominantly so tech savvy that if you asked them for paper they may need more educating on how to get it, than if you were to ask for a digital ID.
The way I see the landscape evolving is that in time you’ll have a digital identity from a chosen provider and you will be able to use that identity in different places depending on the certification it has. The identity will be transferable, digital and personal. It will be trusted and it will be fit for purpose.
As we move forward there is no need to suffer losses due to unbalanced objectives. Everything needs to converge and connect – it needs to be created under an entire infrastructure that isn’t siloed but centrally architected. We need to move to a place where systems will no longer topple like a game of jenga they are built upon, but they are multi-layered and agile. APIs offer a much faster way of ‘plugging’ in data and integrating tools – quickly.
To gain trust and maintain it we need to ensure we reconsider everything. We need to ensure we put the customer, and their expectations on your business – and the market – at the core. We don’t need to respond to and solve problems, we need to find them and then solve them. We need to be one step ahead and we need the ability to be in that position. How we get there will be interesting – but it is exciting. Every sector has a huge potential and 2018 is the start of a more integrated and value led proposition for all.