Consumers have been burned by financial institutions in more ways than one. From data breaches to market crashes, many have lost trust in the traditional financial system’s ability to deliver the security and stability consumers need. But what would it take to change that? Ray Wizbowski, CMO of Entrust Datacard, shared with Karen Webster how establishing an economy of trust — and bridging the gap between banks and consumers — can become a reality.
If a chain is only as strong as its weakest link, then a company is only as strong as its weakest competitor. Nowhere does that analogy hold more true than in banking, especially when it comes to earning and keeping a consumer’s trust.
It’s been a long road back to strengthening those weak links as banks have weathered the aftermath of the financial crisis. The 2016 Edelman Trust Barometer reflects a resurgence of trust from those days — as financial institutions gained more than any other sector over that period. As positive as that story is, there’s no doubt that the revelations of fraud at well-known financial institutions and the assault on the sanctity of the bank/consumer relationship that it revealed will shake consumers’ trust even further.
This comes at exactly the time when consumers need to feel that their bank has their back.
Today’s digitally driven payments space has turned money into something much more intangible than it used to be — making trust a critical factor in getting consumers to trust their bank to innovate payments and banking services more broadly.
“Because value is abstracted so much … it really comes down to trust being the foundation of future growth,” Ray Wizbowski, CMO of Entrust Datacard, explained.
Enter the economy of trust: a simple but powerful concept that has the bank front and center in creating a trusted foundation that can be leveraged across all of its payments, banking and financial services touchpoints. Making banks responsible for enabling that trust means that consumers don’t have to worry that their trust is compromised in any channel where they do business.
Leveraging The Trust Factor
Whether banks can be the economic force of trust really comes down to determining if banks can be in the position to be a trust broker for all of the things that pertain to their consumers, Wizbowski said.
“There is an opportunity for financial institutions to be that, but they’re going to have to partner with some other technical pieces that enable [customers] to leverage that trust relationship,” he stated.
One way Entrust Datacard believes banks can do this is by leveraging the trust relationship that’s established with a consumer when their identity is verified and associated with their respective account.
It comes down to the bank using that underlying identity and leveraging it for other aspects of interaction with their customers.
As Wizbowski pointed out, this could be as simple as a consumer walking into a branch and the bank knowing who they are without a consumer even having to identify themselves because there’s a mechanism in place to instantly perform that identification verification — whether that’s via a secure container like a mobile device or some other digital credential.
Banks Take On Digital Identity
In the same way that governments can issue verified identification instruments like passports or ID cards, Wizbowski said there could be an opportunity for banks to one day issue an authenticated digital identity for their customers.
That digital credential would travel with a person wherever they need it to, whether that’s for transacting, opening an account or establishing personal identification.
Although Wizbowski said this is not impossible, it would still be a major challenge.
From a technical perspective, banks could use what Entrust Datacard calls a derived credential to take a proven identity that is then translated into a certificate-based identity. This would provide a high-level assurance that a person is who they say they are. The same type of technology that secures a website for eCommerce transactions could then be associated with an individual and put into a digital format.
But who would trust that identity?
Wizbowski argued that it may be difficult for the government, or even customers for that matter, to actually trust an identity that’s issued by a financial institution.
“That’s the challenge that banks will have unless it’s a central bank doing it,” he said. “For a for-profit entity like a tier 1 financial institution in the U.S., there will always be some level of underlying mistrust in giving that much authority over to that body.”
The Long Road To Establishing Trust
Regarding the economy of trust, financial institutions would have to take the many disparate functions across their own ecosystems and deliver a consistent experience across all touchpoints a customer has with them, Wizbowski explained.
Today, many customers have a complete different experience when they visit a bank branch — from when they make a call to a help center or walk up to an ATM.
However, Wizbowski said that can change with consolidation and a customer being given a single digital identity that can be used to leverage a more consistent experience across channels.
“A baby step would be making the experience across the bank consistent, [and] the next step beyond that is to then leverage that and expand into a broader ecosystem play where that identity becomes something that’s a little bit more meaningful across many different parts of life,” he explained.
While a digital credential may not be tangible, it could be leveraged to deliver the palpable dimensions of the economy of trust.
“The bank has to make strides in rebuilding the trust relationship with consumers,” Wizbowski said. “The way that you begin to build that back is through the multiple points of interaction that the bank has with their consumers. Consumers don’t want to walk into a bank branch unless they absolutely have to, so you have to make sure that the experience is positive and meaningful.”
That could look like a bank being able to instantly issue a new payment card to a consumer at the branch level when a card is lost or stolen. By solving the problem quickly and delivering a meaningful experience, that financial institution could move a little closer to reinforcing trust.
“The more that the bank can provide a secure, frictionless experience for consumers, the more the trust gets built back into that relationship,” Wizbowski said.
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