The increasing introduction of standards regulating management of digital identities, such as the General Data Protection Regulation (GDPR) and the second Payment Services Directive (PSD2) in Europe, is obliging brands to rethink or improve the way they manage identities and their protection, as well as tools deployed in the service of consumers. In order to achieve this, brands must focus on four developments to be expected.
1. Means of Authentication
The implementation of Strong Customer Authentication (SCA), required by the FIDO Alliance and PSD2, is certainly the most challenging change for commercial and financial exchange platforms. Market researcher 451 Research has found that many companies are not entirely aware of the impact of SCA.
"Our survey shows that companies are not properly prepared, and what is even more worrying is that they don’t fully appreciate the way in which SCA will transform online purchasing for European consumers," says Jordan McKee, an analyst who works for the firm.
This authentication means brands need to rethink the experience so as to take into account both the device being used and its biometric capacities. There are several possible scenarios depending on your users’ level of knowledge, and the software architecture you have. This architecture will, however, need to evolve to include new trusted third parties to manage the authentication process, new biometric capacities, and data collection in accordance with the GDPR.
2. Personalisation of the user experience
Knowledge of the customer is essential to personalisation and has become the new godsend of any marketing approach. But this knowledge must be able to identify customers, in order to link them to a profile and make their individual experiences unique. Platforms that do not comply with these standards will not be able to provide a personalised experience. It is therefore essential to begin integrating these new means of identification as quickly as possible. However, it isn’t always necessary to identify the user. Amazon has devised a recommendation system based on the product instead of the customer. By analysing customer paths, the system deduces a chart of inter-related products. Seeing as consumers can be versatile, it makes more sense for Amazon to base their process on products.
3. Simplified payment
Newly simplified payment methods are transforming points of sale and the way purchases are made. Retailers are taking a close look at mobile checkout solutions such as Square and SumUp, or concepts like Amazon Go and SmartShelf. SmartShelf technology offers the "Frictionless Shopping" model, in which checkouts are replaced by computer vision. Cameras are linked to artificial intelligence, which analyses videos live. AI identifies consumers and their feelings, and detects both their behaviour and movements, which means it is able to charge customers for the contents of their baskets in real time without them having to go through checkout.
And this is only the beginning, with the development of facial recognition technology in China. Following in the footsteps of Sephora, Carrefour recently inaugurated its new French-style concept store on the famous Wangfujing Street in Beijing. It includes numerous innovations, in particular payment through facial recognition: a system launched in April 2019 in its 210 hypermarkets in China, in partnership with Tencent via WeChat. Caution is still required, however. Facebook Messenger's experience in Europe shows that some methods of payment simply do not appeal to users. Furthermore, although the GDPR and PSD2 bring more security, they also make the payment process more complicated, which is what Facebook found daunting in its experiment. The act of paying for something is still seen as sacred in Europe.
4. Digital identity versus civil identity
Digital transformation is leading us into a digitised world that boasts lots of services and products, in which our digital identity will be as strong as our ID documents, thanks to technology and regulations that will make it unique and forgery-proof. Le Vote, Orange’s Civic Tech start-up, is using digital identity to provide a solution for municipalities that wish to consult their citizens in local matters. The solution includes a website for elected representatives and a mobile application for citizens based on blockchain technology, to guarantee the security of polling. Le Vote is already in use in several municipalities in France, and will soon be available at international level. It is easy to imagine that approaches to the economy, performance and productivity will quicken the pace of this digital transformation. It will become increasingly difficult to do without a digital identity, whether it is to access State services (as in Estonia, where everything is done online) or go about work and everyday life. This transformation is already underway.