Trust was once static; now it’s fluid and dynamic.
Brands and institutions used to build relationships with their customers through face-to-face interactions. Now that we’re living in a “digital everything” world, can we regain that feeling of familiarity? Is it possible for consumers to enjoy digital, remote, and around the clock access and conveniences while feeling the same level of trust that kept them loyal to brands and institutions in decades past?
Everyday Trust is a series of conversations in which I discuss the role of trust in a rapidly changing technology landscape with leading thinkers in business, technology, and government. In this episode, I spoke to Melanie Subin, Managing Director of the Future Today Institute (FTI).
Melanie’s definition of trust is simple: “Trust is another word for relationship.” As she observed, “Banking 15 years ago, you would go into a local branch and you would know your teller by name. You knew these people. And you trusted them because they handled all your finances and they saw your family grow up.”
The challenge for the financial services sector (and other sectors) is that technology is altering customer relationships, in large part because a digital relationship can be harder to authenticate than a face-to-face one. In a digital interaction, how do we elevate the importance of verification so that we’re comfortable that we know who we’re speaking to?
In digital interactions, bad actors can pretend to be someone they’re not, which erodes trust from both the customers’ and organizations’ perspective. This opens the door to fraud. In another episode of Everyday Trust, I spoke with Amy Webb, Founder and CEO of Future Today Institute, about the increasing number of opportunities bad actors are capitalizing on today.
At the same time, organizations want to grow by expanding their customer bases. How can they safely onboard new users and customers against a backdrop of increased fraud? Organizations also want to drive growth by leveraging and deepening their customer relationships, which means more transactions (and more kinds of transactions) with each customer — including transactions that require customer verification.
As organizations – including the financial services world – grapples with these questions, this episode of Everyday Trust deals with how organizations can leverage verification technologies to help ensure our interactions are authentic — because authentic relationships are the foundation the economy is built on.
The opportunity: Reshaping the customer relationship for a digital future
There’s little question that leveraging digital technology to help manage finances delivers efficiencies and benefits for consumers; they are now able to handle many transactions that used to require a bank visit, all while relaxing at home. We like the conveniences that digital technologies bring. It makes our day-to-day lives easier. And with more innovation on the horizon, we aim to make transactions even easier. (Imagine completing the entire mortgage process digitally, from our own living room? Someday you might.)
For financial institutions (FIs), digital banking means being able to offer around-the-clock and personalized service, creating a richer, improved customer experience while controlling operational costs. It means growth through digital onboarding of new customers. Digital banking can also facilitate data-gathering that informs new and innovative offerings.
But before we truly realize all these benefits, we must make it easier for organizations to authenticate and validate the relationships they have with their clients and customers. Not least so that FIs and other organizations can answer the all-important question: Is this person who they say they are? Getting this right could itself be a major boon for the economy: The Digital ID and Authentication Council of Canada (DIACC) estimated that validation, verification and authentication could unlock around $15 billion of value for the Canadian economy through efficiencies.
I expect these technologies will also be valuable tools in the fight against digital fraud, which has continued to rise. (The Canadian Anti-Fraud Centre received fraud reports with a value totalling $569-million in 2023. Statistics Canada says fraud cases doubled from 2012 to 2022. And a TransUnion study said 5 per cent of digital transactions originating in Canada in 2023 were suspected to be fraudulent.)
Against that background, Melanie and I spoke about the questions Canadian leaders in business and government are working through around trust, data security and data sharing — and how these will all shape the way organizations develop and maintain relationships with their customers in the future.
Digital customer relationships and trust: A few of the big questions
1. How has the financial services sector seen its relationships with customers changed?
Melanie and I talked about how, as companies grow and expand into digital landscapes, it can take away the personal aspect of customer relationships (think of the teller example). This trust is now based on whether they think the organization they’re working with is reliable.
Another aspect of this shift is that interactions between companies and their customers now often involve an exchange of digital data — and consumers are often wary of that sharing, even if they engage in it.
At Interac, we’re deeply invested in data security and customer trust. According to our recent study, 72 per cent of Canadians we polled are concerned about what companies have access to when it relates to their personal information. As Melanie said during our conversation, “When it comes to our data being gathered and how much information we’re giving up, transparency into [how our data is] being used is critical. A lot of consumers today know that they don’t know where their data is, or how it’s being used.”
Being transparent about how data is gathered, and giving consumers control over how it’s being used, can engender trust. At Interac, we think one of the most promising aspects of digital verification solutions and technologies is the way they can be part of facilitating trust in a data-sharing relationship between customers and organizations.
2. How could AI play a positive role in maintaining trusting relationships?
Another technology we talked about as having the potential to reinforce trust — perhaps counterintuitively — is artificial intelligence (AI).
I pointed out that AI already powers solutions that can help organizations know-your-customer (KYC) policies. AI can also help companies with anticipatory recommendations when a customer is speaking with a service representative.
But with some imagination we can see even more inspiring examples of how AI could strengthen relationships between consumers and organizations. Melanie brought up the potential of real-time voice translation and its ability to direct customers to a service representative who seemingly answers in their language — even if they don’t actually speak it.
“I think using those technologies can help bring back that feeling of being in front of the teller that you knew for your entire life,” Melanie said.
It’s worth looking at how you integrate new technology into future work and organization management. Melanie and I discussed how organizations should not just follow trends as validation to sign off on big investments and shifts in technology (like AI-driven strategies). What’s required is carefully mapping out future scenarios through an exercise she calls “strategic foresight.”
3. What is strategic foresight and how can it help organizations maintain trust in digital relationships?
Strategic foresight is playing out different potential outcomes — something like a game of chess (it actually has a history in war games, Melanie explained).
“Talking about it in the context of trust,” she said, “if a big organization is about to invest in a huge digital transformation effort, or they’re about to overhaul their data management practices, using scenario planning and strategic foresight is a way that leaders could play out how different approaches might impact consumer trust… before they actually make that huge investment.”
I agree that strategic foresight can benefit an organization that’s grappling with competing options. I think it helps sharpen an organization’s strategy, figuring out where you should play — and how you should win.
At Interac, we spend a fair amount of time working through scenarios together in terms of where we should be playing in the market and what kind of value we can continue to bring. As I said when I spoke with Amy Webb, founder and CEO of Future Today Institute, I believe our role at Interac is to enable data-sharing and transactions that drive prosperity for everyone. That’s why we’ve been working on how to broaden access and competitiveness in the digital economy, and generally help Canadians embrace this digital future.
4. What can Canada do to improve trust between consumers and organizations?
I’m an optimist. While Canada is a bit further behind other countries that have embraced things like GDPR (the European Union’s General Data Protection Regulation, which sets down rules protecting people’s data security and rights), I think we can leapfrog that, particularly if lawmakers embrace things like open banking and open data.
Melanie said her advice to lawmakers would be to learn — but listening is even more important. “Lean on the organizations and the companies that know the technology well, that know these markets well, and then understand what the needs are,” she said. “It’s not necessary for lawmakers to become an expert on AI or on data management, as long as they’re getting their information from reputable sources that have experience in this space — which in this case is the private sector.”
The private sector has its own thinking to do, she said — specifically around how to safely and intelligently manage and store data. “I would say most leading companies are not prepared to really execute sophisticated data management,” she said. I added that some companies are already doing this well, and they’re going to have a huge competitive advantage.
I think it’s important to note that Canadian banks are working from a position of strength. The Canadian Bankers Association recently published polling results that showed 86 per cent of Canadians trust their bank to offer secure digital banking services and 87 per cent trust their bank to protect their personal information.
And looking ahead, I think there’s an obvious role for networks like Interac to help convene the ecosystem around solutions that foster trust in digital relationships. There’s a lot at stake here, and for the sake of the Canadian economy, we need to get it right.
Watch the full conversation with Debbie and Melanie
In the full video, Melanie and I talk about other facets of the conversation around emerging technologies, data security and consumer trust — including how to make inclusivity a part of our thinking, the ramifications for trust when companies host data overseas, and why Canadians trust highly regulated industries (like banking).
