October 16, 2018
October 9, 2018
Posted June 14, 2018
In this episode Frank is joined by David Fapohunda, Director in PwC’s Financial Crimes Unit. They discuss the importance of understanding customer behavior, and how sometimes customers want more friction if it means a safer experience.
Frank: Hey everybody, welcome back to Digital Identity 360 here at the Paris summit. Our Digital Identity Summit. I’m honored to have David Fapohunda with me from PricewaterhouseCoopers. He’s been a great participant on the main stage. Also, a great partner of the summit. David, honored to have you.
David: Thank you for having me! This has been so exciting
Frank: Excellent! Awesome. David, a lot of what’s come out of the Summit has been really interesting. In fact, your presentation is this idea of understanding this amalgam of data and how it’s being used across fraud prevention, compliance, regulatory issues, things like that. As you think about all the presentations between today, you made a great point earlier about operational efficiency being an interesting part of the outcome. What do you think are the two biggest things as people think about digital identity, and the power to predict, that are your takeaways from this summit.
David: I think the idea of digital identity not only for its risk mitigation perspective, but for its business empowerment perspective is a great idea. A lot of times, risk world, we aggregate a lot of data to make sure we know who the customer is and the ability then to know what the customer wants is a great opportunity we can tap on-
Frank: Yeah, absolutely.
David: And then move us to the next level. And the idea that we understand the customer to this degree also enables us to understand their preferences and where their tolerances are. A lot of times people talk about frictionless. But sometimes customers want friction-
Frank: That’s right
David: As it was mentioned earlier today.
Frank: That’s right.
David: So the idea of having that personal risk profile, that personalized risk service, where you can give the friction when it’s wanted-
Frank: That’s right
David: Or take it away when it’s not needed is the ultimate goal.
Frank: Think of, we are all going to fly out of here tomorrow. We want to go through the metal detector cause we have a degree of safety. There is kind of this understanding that a little bit of friction’s implied and necessary. And we deal with it. One of the things that Neira said that was super interesting though. She said, if you look at her presentation about just how customers don’t want to be challenged for things that people should know they do. So, friction is good I think for new stuff to some degree, but think of the notion of a customer who says, “look I want to abandon this transaction, if there’s too many screws. You should know it’s me traveling.” What are your thoughts on that idea?
David: Let me take your analogy of that airport. I love the idea of having a known traveler, because I’ve traveled so frequently, I shouldn’t have these same amount of friction. I did go through a biometric verification, a background screening-
Frank: That’s right. An interview
David: An interview and beyond boarding. So my experience through the airport should be seamless since the airport, the airline, as well as the transportation agencies should know who I am. At the same token, when that level of understanding isn’t present, I expect a long queue for those who don’t have the expedited service.
Frank: This is interesting. In the airport scenario you have no choice, but online, you can abandon. You can go to another customer. So, if I’m a customer that should be known, and my behavior is not anomalous, the chances of abandonment of that brand and going to a competitor and therefore loss of market share is real. Especially among millennials I should say, who have little brand loyalty to anything. They may decide, you know what forget it they should know me by now, I’ve had enough and bail. It was an interesting takeaway for me from this thing. The other thing, David, that was interesting was, PwC, you guys have connection to the C-suite that no others have. It’s amazing to me how this whole concept of understanding the customer’s identity has now bubbled up to the top. Can you speak to some of the initiatives and some of the imperatives you’re seeing at a very high level for a firm like yours to get this done.
David: Well a lot of what we’re hearing at the C-suite level is to know the identity of the customer and how we can utilize that information, those data assets, and then how do we protect them. Everyone is going to be breached. It’s not a matter of if, but when. And so, knowing, not only do you have on the customer what data is in your different disparate data systems, becomes as important as actually knowing the customer. Because you have to know where you store that in the event that such an issue arises. So, a lot of focus from the C-suite is building out these response plans, and knowing where the data of the customer exists so they can focus on that. And then to analyze it, to understand if they’ve been breached how they’ve been breached. And what’s funny is the regulations are following that idea-
Frank: Yeah that’s interesting.
David: Right? GDPR is often times is considered about restricted data. It’s not. It’s really to just set the guide rails or the goalposts for where organizations both financial and non-financial should operate within, so that the customers can have a sense of security. And I also believe that the government should have a sense of security. As I mentioned earlier the idea where nation states become a matter of security on how the different disparate data of their populations are stored or being harvested or sold or being manipulated.
Frank: It’s an interesting perspective because this whole idea of understanding your customer. You just made a point that has been contrary to every GDPR discussion we’ve had today. Everybody’s sitting their going “root canal” things like that. But I guess you’re right to some degree it establishes guidelines that say, look if you live within these guidelines you’re going to be fine. If you don’t, you’re going to be in trouble. We found in our organization a tremendous amount of effort going into things like forget me applications, which are difficult in the sense that in our world someone’s right to be forgotten is going to be adopted by the fraudsters and not regular good consumers. I think there is a nice balance there between a restrictive element and also protection.
David: Another analogy I like to think about is one, I went through my driver’s license certification. I rode bicycles wherever I went, and I averaged about 15 miles an hour. But now to get my driver’s license there are some of these guidelines and goal posts that existed. Not to prevent me from getting from point A to point B, but to allow me to go 55, 65, depending on where the limits were on those roads. And so those restrictions have now enabled me to go further, to go places I haven’t been to, and to experience things that I never experienced before. And so GDPR looked in the right context should be an enabler to people so they can go farther. Allow their business to grow.
Frank: It’s interesting. I was thinking earlier today, the application or the analogy is Y2K redux. Except that in Y2K it was a fear-based everything’s going to stop at midnight, where you’re right I think this is where you guys can be super helpful at the C-suite and say, guys this is more than simply attacks. This is really a guideline and as you say some goalposts, some guard rails around how you should operate your business. So, great insights. Biggest takeaway.
David: I really love the idea of data in Las Vegas is now permanent on YouTube. Gone is the idea of what happens in Vegas stays in Vegas. Now it stays on YouTube. And I thought that was a great analogy in terms of how permanent our digital presence is. But yes how separated it has been. So one of the great ideas within this is the merger of the physical digital identity to the logical, excuse me, physical identity with the logical, digital identity. And so when you look at that ability, that really opens up new opportunities, greater insights, and then also, it really opens up your eyes to your awareness of your behaviors. Cause now your experiences in the physical world will follow you permanently in the digital and vice-versa.
Frank: It’s so interesting. It speaks to context. And you mentioned something earlier that’s very interesting. Good things happen to bad people. And if I’m too restrictive and I haven’t got the context, a good customer walks away unsatisfied and not being able to consummate a transaction. If I’m too loose, then I have a problem. So I agree with you, this idea of global data of how we use it and contextually how we both adopt proper friction but at the same time facilitate commerce is really cool.
David: Yeah, I think that the idea of the context really hit home today. Looking at that image that was presented, and the two perspective having different meanings specifically. And really bringing that to how the institutions use the products. The ideas of developing strategies or rules to focus on one thing. But when you look a broader context at a global level, just the perspective that gives you, it’s something that’s very important. And actually why a lot of institutions come to us because we’re such a global firm, we give a different perspective to rethink what the potential opportunities are.
Frank: Yeah, true, your view cross-industry at the global level I think is so important. Well folks there you have it. We are delighted to partner with PwC and David. They are absolutely a luminary and a great partner for us in the field and a great sponsor here at the summit. Check them out, and David thank you very much!
David: Thank you very much
Frank: Thank you.