Remember the movie Alien? I am sure you do. One of the best movies of all time and certainly one of the top five science fiction movies ever made. Remember how the screens made noises, how the crew flicked switches and how the navigation officer turned a dial to control his computer? You probably think it seems a little anachronistic now. You probably think that starships, will be all smooth surfaces and touch screens. I’m not so sure that those will comply with future safety regulations though!
Safety First
European car manufacturers are being encouraged to stop using touchscreens for basic functions. The European New Car Assessment Program (NCAP) will next year bring in new rules which mean that the vehicles it assesses must have certain physical controls to receive a full five-star safety rating. NCAP is an independent and pretty well-regarded safety body for the automotive industry and the reason that it is making these changes is because they have concerns regarding the increasing use of touchscreen controls, which are believed to contribute to driver distraction and potentially compromise safety on the road.
(These ratings are important. European car buyers pay attention to the NCAP scores, and unlike in the US, manufacturers leverage the ratings in their marketing campaigns.)
Who cares, I am sure you are thinking. Those woke Europeans with their silly focus on safety. Americans won’t go back to analogue control. Wrong. It already happened way back in 2020 when the US Navy replaced the touchscreen controls on destroyers with physical knobs and dials (following the report into the fatal 2017 USS John S McCain collision).
As fintechs dream of future where transactions are as simple as a glance or a wave, we must ask ourselves (as Alex Kreger does) whether perhaps we are in danger of eliminating too much friction and at what cost, because it turns out that sometimes safety needs a little friction, and that is true for social media and financial services as much as it is for luxury cars or ships of the line.
This is good friction, friction that services a strategic purpose, designed to enhance security and decision-making. In fintech, one of the primary examples of good friction is strong authentication. By adding this extra layer, financial institutions help protect users from fraud and while it might introduce a slight delay, the subsequent feeling of safety and assurance is a major benefit to customers.
There is also, by contrast, bad friction that stems from inherited legacy systems, lazy lack of innovation and good old-fashioned rubbish customer service design. This type of friction does not enhance anything, it just means customer frustration, inefficient processes and lost business. It can ultimately deter users from engaging with services at all.
In summary, while good friction can play a valuable role in protecting consumers and ensuring that financial interactions are secure and thoughtful, bad friction largely results from inefficiencies and can be detrimental to customer satisfaction and loyalty. Financial institutions aiming to strike the right balance must carefully design their services to incorporate beneficial friction while eliminating unnecessary hurdles. What might they do, then, to strike this balance?
Dr. Elisabeth Carter, Associate Professor of Criminology at Kingston University in London, has a very well-informed view around online harms and she says that “conceptual change” is needed so that a frictionless online experience is not seen as desirable but dangerous, akin to jumping into a car and driving off without putting on your seatbelt. That’s a great analogy, and I could not agree with her more. Jumping on to a motorbike and roaring down the road with the wind in your hair is great feeling, brain damage not so fun.
I think that the relevant conceptual change, and the relevant friction, the online equivalent of the standard three-point car seat belt that no-one even thinks about any more is already clear, even if people do not see it that way. The conceptual change is from elecronic versions of analogue identity (ie, digtised identity, which has been around since the dawn of the web) to new forms of digital identity that are native to the new environment.
In the UK, I think it is time for the regulators to step in and demand action that goes beyond the age verification work underway now. When I was last asked to log in to a web site to buy something, I was presented with the option to “Log in with Google” or “Log in with Apple” but no option to “Log in with your safe and trusted digital identity that is part of a regulatory framework designed to protect you and your family and that comes with expectations of redress, ombudsman, accountability and, ultimately, a physical presence to resolve issues”.
Now, whether it is the government or the banks or the telcos or tech companies or media organisations or whoever who provide such as practical, regulated and pervasive solution (the internet seatbelt, that is) may vary by jurisdiction or business model but not by priority. We need it now.
Safety For Society, Not Only Finance
Coming back to science fiction, and the theme of a future of relentless conflict, I think we should make fixing identity this way not a fintech priority but national priority. That is, I think that digital identity should be seen as a fundamental defence in the cyberwar that we are already in and that has no imaginable end. This is no hyperbole, this is our new reality. General Sir Nick Carter, Britain’s Chief of the Defence Staff, said that our nation is “at war every day” due to constant cyberattacks and, even more interestingly, went on to say in the modern world there is no longer a distinction between war and peace.
(Incidentally, when I stopped by MIT’s Dome at Davos earlier this year, I sat in on a panel discussion about AI in which Youshua Bengio put forward an interesting perspective, noting that the security services work to protect us from the actions of hostile nations and that perhaps we should view AI as one of those hostile powers., which suggests to me that we need to accelerate our thinking about extending digital identities to bots.)
This is precisely as the great media theorist Marshall McLuhan predicted. In Culture is our Business, written nearly more than half a century ago, he said that “World War III is a guerrilla information war with no division between military and civilian participation”. This is why we need to take digital identity seriously, as strategic infrastructure and as matter of national urgency. It is not just about making it easier for people to log in to their financial institution and making it harder for fraudsters to scam them on social media, although those are both welcome by-products of a well-designed system, it is about safety for our people, our institutions and our democracy.
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