Covid-19 and the touchless digital economy – and its ironic magnification of online friction

Frank Teruel is chief operating officer at data consortium ADARA.

Sir James Murray, the famed Oxford lexicographer, would surely be rethinking his “slips” of the word “friction” in today’s digital economy.  After all, if Oxford’s view of friction (loosely paraphrased) is “the resistance encountered when two objects come in contact and try to move beyond each other” how can friction possibly be associated with a “touchless” digital interaction?  Especially since the digital economy, which loathes friction and the resulting transaction abandonment, has worked so hard to ensure a smooth ride for its returning customers.  Right?  But…what about all these new and frequently returning customers and who are they? 

New users, new users, and more new users

Few forcing functions have magnified the friction between a clean CX and verifying identity like the global pandemic.  Just since March, the numbers of new entrants into the digital economy has skyrocketed and not because of some epiphany that digital is the future but because they have very few other choices. 

Worried about exposure to the bug but:

  • Need stuff? Amazon has you covered… go online
  • Need to pay your Vodafone mobile bill without touching something? Go online
  • Need to order groceries without going to Waitrose? Go online

need to send money to a family member without going to NatWest…go online

But, what if you’re new to the digital economy? These vendors that are all anxious to help you with your shopping, banking, and eCommerce needs then have a problem. Do they trust this brand-new customer and risk fraud losses, or do they introduce friction and risk transaction abandonment?  Moreover, what about the volume of returning customers?  Is the increased frequency legit or are these bad actors with stolen credentials?  So, what do they do…they step you up to make you prove that you are really you.

Who are you?

In the physical world, this conundrum is pretty easily answered.  At the point of sale or identity verification, you present your highest most trusted form of identity within the context of that transaction and, bingo, you’re done.  The physical world provides a hierarchy of identity and transaction context that is easily determined and makes sense.  For example, when you travel and are interacting with Border Control, your passport is the best way to proceed.  It is issued by a trusted government entity, has all of your pertinent information, and is implicitly trusted.  Outside of your DNA, it is your most trusted form of identity.  Conversely, when you visit a local library, your library card is perfectly acceptable.  Show up to border control with your library card and you will face friction.  Why?  The context of that transactions dictates the identity verification based on the trust in the issuer. 

Multiplicity

Online, however, there are several challenges.  First, you have multiple identities that must be harmonised to truly understand if you are you.  Assuming email as the lowest common denominator of identity, your work, personal, school, family, and spam email accounts all represent identities that you use to transact across multiple industries and services.  You probably use your university email to message lecturers and to access research papers online.  You log into your Amazon account with your personal email and use your company email to review your HR plan. 

Each of these transactions are distinct versions of you transacting with vendors that verified your identity using their own digital identity solution.  That raises an important question.  Unless all of your online identities are harmonised, can anyone of them really be trusted?  A compromise of any one of the identities, threatens them all and increases the risk of fraud.

Who can you trust and how do you know me?

Online, there is no recognised and always trusted issuer of identity.   Put another way, there is no hierarchy of identity.  On the contrary, there is an entire digital identity supply chain each armed with their own identity graph derived from their understanding of your activity.  Often, that identity is an amalgam of the vendor’s direct interaction with you, third party cookies, identity partner signals, publicly available data, and behaviour inferred and modeled based on prior activity.  But does anyone of them really know the “whole” you?

Bye bye IDFA and see ya, third party cookie

To compound matters further, the device identifier so frequently used by marketers is making an abrupt exit in just a few short weeks with the release of Apple’s iOS14.  Further, the third-party cookie so magnanimous in its data sharing is sailing of into the sunset in a few quarters.  Each of these events further complicates the identity landscape and the timing cannot be worse.  With a flood of new customers coming to the digital economy, each with new or infrequently seen digital identities, the tension between friction and customer experience is once again front and center.

Harmony, context, confidence, and trust

So, what should digital businesses do to temper the increased friction while not opening the floodgates to opportunistic fraudsters?  What is the best digital identity solution in the crowded digital identity supply chain?

In the midst of all of these changes, your identity solution needs to understand the context of the transaction, harmonise and verify the identity across multiple industries thereby increasing the global view of that identity, and provide a you a trust factor relative to the specific transaction.   Think of it this way:  confidence that the customer is the customer and trust that, within the context of this transaction, there is nothing weird in the customer’s behaviour.  The key: all within the global view of a harmonized identity…all of them…if your digital identity can’t do that, embrace the friction.

In the words of Sir James Murray’s beloved dictionary,  “harmonise (with something) if two or more things harmonise with each other or one thing harmonises with the other, the things go well together and produce an attractive result,” and what is more attractive for digital identity than no friction and no fraud?

Photo by Agence Olloweb on Unsplash

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