For many, the pandemic was punctuated by a steady stream of Amazon packages, holding anything from zoom equipment to work from home to Christmas presents for remote-only openings.
In all things, companies try to emulate the logistical powerhouse of Amazon, and it goes deeper than just moving boxes: Amazon’s customer service has been the sole focus of founder Jeff Bezos. He has said he does not care about competitors or cost, only customers.
“The best customer service is if the customer doesn’t need to call you, doesn’t need to talk to you. It just works,” Bazos said.
So, how can financial institutions provide more Amazon-like services in a digital-first world?
Sarah Clark, SVP of Digital Identity at Mastercard, Ahron Geminder, global head of product for third-party services at HSBC, and Mike Tuchen, CEO at Onfido, sat down with moderator Bo Brustkern on the Fintech Nexus USA keynote stage to tackle the topic.
“I really missed live music during the pandemic, and conferences are the live music of commerce,” Brustkern said. “I’ve got three rock stars up on stage with me, and they had no idea I was going to introduce them like this.”
HSBC believes in frictionless
Geminder said his role at HSBC focuses on building innovative ways for third parties like fintechs to interact with the HSBC ecosystem.
“I also have the joy of looking after our digital identity platform,” he said. It all comes down to ease of use, from embedded products to central account creation.
“I say to people internally: No one wakes up in the morning and says, ‘I’m going to open a bank account because that’s going to be exciting,” Geminder said.
“You want to make it as frictionless, simple, and easy as possible. The only barrier right now is digital identity verification, the ability for me to know that you are who you say you are when you open an account you want to interact with us. That was the missing piece of this puzzle.”
He said that the nirvana HSBC and the ecosystem are trying to reach one-click verification for ID and more. The call for Web3 digital sovereignty has seen the rise of nongovernment IDs, but Geminder said the problem is ID verification is a significant liability for financial services. Let it be the government’s problem, he said, and build systems that make it easier to translate that trust to digital.
Elephant in the room
“We have to at some point accept that there has to be something we trust, and we trust a digital or we trust an ID issued by a government,” he said. “The moment we start going down the path of digital ID verification and the creation of consortiums that are providing those IDs, liability is always going to be that on some question, and that giant elephant in the room that has to be solved.”
He believes the Amazon one-click buy and ship button will never come to banking. It isn’t the one-click shipping that Amazon perfected for customer service; it is digitizing and innovating at scale, in a way specific to their industry, he said.
“Everyone looking at the output for Amazon, everyone looking at their success and saying ‘I’ve got to copy that and replicate that for our business.’” he said.
“For us at HSBC, it’s about being completely and utterly obsessed about customers not saying it, but acting it and believing it. It’s about digitizing and innovating at scale. Those are the two things that Amazon really pioneered and pushed forward. You can take that and copy it, or you can take the aim and the outcome; you want to replicate that for your business and your industry.”
Digital identity at Mastercard means government IDs
Clark said the focus at Mastercard comes down to the merging of digital identity and payments. Her team lays down the foundation for what, in the future, “we will share who we are, and who we claim to be.”
She said her team works on building a reusable, globally interoperable ID network. They focus a lot on making government-issued identities easy to use in tech.
She said the pandemic accelerated the conversation, actively pushing governments to move digital transformation forward. If they succeed, she said it can be mutually beneficial; McKinsey estimated that GDP growth could benefit 3% to 13%. Se plans to build one-click identity platforms for government IDs.
“You could onboard your government-issued credential once into your identity wallet, and then with one click, you can use that where proof of your identity is needed,” she said. “It transforms the ecosystem, it’s more privacy-preserving, and for financial services, it helps eliminate fraud in the ecosystem.”
She said Mastercard is in line with the decentralized identity concept of Web3.
“At the core of it is the individual; you and I both have a right to own our own identity and should be afforded the ability to share that easily and seamlessly,” Clark said.
“The future we’re building is very similar to using a credit card; you can assert your identity with one click, and you understand what the outcome will be.”
She said one of the issues with self-sovereign identity is trusting the entity that supplies the ID in the first place: who verifies them? So far, her team works with government issue ID, but the use case moves far beyond.
“It’s about onboarding, and onboarding is where you have an anonymous series of bits and bytes, claiming that they’re a human, and you have to vet that,” she said. “Beyond onboarding, high-risk transactions, interacting with customer service, that suffer from social engineering, phishing, have different touch points where individuals need to have a secure way to touch your business.”
She wants to lay the groundwork for other institutions, like lenders, creditors, and even academic institutions, to create one-click IDs that affirm customers.
“Something that we’re working on is we work with digital education providers as an example; a university credential could come from one of those providers, to be known that they come from a real university. That could be used alongside your government-issued ID for a specific type of student loan or rates that are available to students.”
Onfido and click-measuring contests
Onfido verifies a customer’s identity, Tuchen said, in all the different scenarios in the financial world where “you need to understand who your customers are.”
Founded in 2012, Onfido helps 850 firms or institutional customers solve those problems across 127 countries. And we do that for 850 customers, he said.
At the conference, he said Onfido launched a new platform that allows a lot more configure ability to give customized workflows for different needs in your company and different countries. He said Amazon’s customer experience created a world that compares click size.
“We just looked at a recent survey that said some traditional banks, not HSBC, literally take 120 clicks to onboard a customer right now. The best in class right now take 24 clicks,” he said. “You can imagine customers that used to seeing things happen quickly on Amazon compared to 24 clicks.”
He said Onfido believes the world is heading toward a digital ID held in a digital wallet.
“But today, less than 1% of smartphones in the world have a distal ID on them,” he said.
He said that the problem in onboarding types of ID to digital is choosing which ones to digitize.
He said back in the ’90s when he worked on the secure web HTTP at Microsoft, teams of experts labored over security requirements. Today, it is all taken for granted, but back then, experts had to painstakingly contrive protocols that fit into real life, disclosure, and critical infrastructure.
“Believe it or not, every sophisticated large company had cryptographic experts and encryption experts that would spend hours doing architecture and algorithm review ensuring that it met their security requirements,” he said.
“Fast forward now. Twenty-five years, it’s a solved problem. No one cares about it. You just accept it. It’s been done.”
“The same will be true in the digital world; as new digital credentials come out, everyone’s going to start looking at them and say, Well, who backs it? What’s the level of trust,” he said. “and then they’ll choose based on their policies, what they accept and what they don’t accept, and in what order they might do and what secondary measures might do based on what it has or hasn’t been done.”
In the short term, he sees more disclosure today, building toward a world where disclosure and privacy protections are paramount.