The financial industry is becoming more digital by the day. Online transactions have multiplied by a factor of six in only two years, going from 35 million euros in 2014 to 206 million euros today. This is simply the natural evolution of a market made up of users who work increasingly with online channels.
This change of habits is coming about not only among millennials and younger (and therefore more digital) generations, but among life-long users who feel increasingly comfortable with this new medium and who value the time savings and convenience that it offers them.
But there is another side to this coin: the barriers, challenges, questions, and general reticence brought about by technological change and the new “rules of the game”.
The new financial technologies must combat factors such as a lack of knowledge, traditional company cultures, and even a certain degree of technophobia on the part of consumers.
And so, what are the challenges still to be overcome? By seeking the opinion of nine experts from various industries, we have analyzed the main concepts surrounding digital identity verification and data security.
The connection between the physical self and the digital self
According to Xavier Codó, CEO of ICAR, «everybody has a digital identity, consisting not only of his personal and financial data, but also his relationships with companies and his behavior on the Internet».
The technological ability to interconnect the entire context that identifies a person on the Internet makes identification easier and improves security, benefitting both companies and users.
On the other hand, there are still risks, and the fear of stolen data and identity theft still prevents many users from adopting these channels.
With the recent changes to Apple Face ID, biometrics is once again in the headlines. Although the Apple system is much more secure, for example, than Samsung’s Face Unlock, which uses a 2D image, or the Touch ID fingerprint sensor, there is still widespread reluctance to use biometrics as an authentication method.
On the other hand, according to data from the Google Intelligence study Biometrics for financial services,nearly 160 million devices will be enabled with biometrics for banking transactions by the year 2020. We can deduce from this that acceptance is also very high and can be expected to increase even more.
Perhaps the most controversial concept of all is blockchain. For companies this involves, among other things, sharing their data with their customers, which is perceived as a loss of competitive advantage. For users, the major concern is what happens with their data, meaning who owns it, and who is ultimately responsible for the security of that data.
This is why, although it has enormous potential and represents “a change in which transactions can be made in an open, transparent, decentralized world, leaving an immutable and therefore secure trace”, according to Josep María García, partner and founder of IoT Infinitum Projects, blockchain technology still has many cultural and regulatory barriers to overcome.
Another challenge faced by companies is striking an optimal balance between security and user experience. On the one hand, 83% of consumers say that using connected devices to make payments saves them time and/or reduces their frustration when making a payment. (Payments & VISA Report 2017).
On the other hand, 86% of consumers are willing to invest time and energy to adopt new payment methods, in exchange for the promise of greater security. (Mastercard Safe and Security Survey 2015).
In other words, users want a convenient, fast, and easy experience, but are not willing to give up data security.
Standards and regulations
Regulatory bodies attempt to adapt legislation to technological advances, in order to regulate the relationships between parties and, in the case of the European General Regulations on Data Protection, to protect the privacy of users and prevent the theft of their data.
But there is still no legislation to regulate, for example, the decentralized operations that could be generated by blockchain technology. Any legislation to regulate the digital financial ecosystem will have to be international in scope, in order to deal with operations and transactions initiated from any point on the planet and ending at any other point.
Nevertheless, according to the Global Fintech Report 2017 by PwC, 54% of operators perceive the storage, privacy, and protection of data as the main legal barrier to innovation.
Currently, these are the five areas that are generating the greatest controversy. Are you interested in the opinions of nine experts from the technological, financial, legal, and business sectors about these concepts?