Address universal digital vulnerability with modern identity: Leave no one behind

Albert Einstein once said that “we cannot solve our problems with the same way of thinking that created them.” Nowhere is this more true than in the digital world, which is forever moving at the speed of light. Rapid advances in technology have given us the ability to spend, borrow and invest money at the touch of a button. FinTech innovation has captured our attention with a range of seamless tools to better manage our finances.

The tailwind of digital banking transformation further accelerated by the irreversible forces of the COVID-19 pandemic has reshaped how we interact with financial services. On the one hand, these have enabled new hyper-personal experiences across online, mobile and offline channels. But in doing so, they have also reinforced universal digital vulnerabilities and widened the digital divide. Tackling this challenge with “new levels of thinking”, as Einstein would say, is now more important than ever.

Movement at (variable) speed of light

There is no doubt that digital adoption is increasing across financial services. Research from the Lloyds Bank 2022 Consumer Digital Index shows that 99 percent of the British population has moved “online” – up from 89 percent six years earlier. Monthly announcements from the Open Banking Implementation Entity (OBIE) show that seven million of us use Open Banking services to make payments and gain visibility into our finances.

But as with all rapid changes, there is always a downside. The same research from Lloyds Bank shows that as many as 27 percent of the British population have “low digital capacity”. And that’s not all. A further 35 per cent are struggling to get online as a direct result of the cost of living crisis. But the reality is that digital vulnerability is even more widespread than this insight indicates.

As consumers of digital financial services, we are all, to varying degrees, either temporarily or permanently at risk of becoming digitally vulnerable. A young person becomes inherently vulnerable when asked to complete difficult know-your-customer (KYC) checks while trying to open a junior account. An adult becomes situationally vulnerable when he seeks to complete step-up authentication (SCA) while unable to find his smartphone. A pensioner becomes inherently, situationally and (potentially) pathogenetically vulnerable when he attempts to transfer money via the online banking portal despite being unable to do so due to his audiovisual complaints.

Universal digital vulnerability

The concept of digital vulnerability is as grand and elusive as it comes. That’s because we tend to associate vulnerability with a particular set of characteristics that make us less “well off” compared to others at a particular time. This conceptual approach always encourages us to start developing point solutions that seek to meet these challenges. Nowhere is this more prevalent than across digital financial services, where accessibility controls are seen as a panacea for all digital vulnerability challenges.

There is no doubt that improving and expanding accessibility features across digital financial journeys is hugely important to helping people easily and safely connect to the digital world. But here lies the challenge: this does not go far enough. And that’s because digital vulnerability is universal and affects us all in different ways, and at different times. Leveraging Lahad and Cohen’s seminal work on “Vulnerability Circles” provides us with a useful conceptual model for defining three domains of universal digital vulnerability:

• Inherent vulnerabilities: driven by temporary or permanent individual characteristics, such as age, gender, health, disabilities

• Situational vulnerability: driven by contextual factors, such as social, economic, personal and environmental conditions that affect the individual

• Pathogenic vulnerabilities: driven by interpersonal factors, such as social norms, prejudice and exclusion

Tackling the problem at its root

But there is a way forward. By embracing the notion of universal digital vulnerability, financial service providers and software vendors can tackle the problem at its root by leveraging modern digital identity. At a fundamental level, identity and access management (IAM) enables digital providers to understand our contextual needs, vulnerabilities and circumstances, and use these insights to deliver improved digital access experiences that are:

• Adaptive: using the right channel at the right time to deliver value to the customer when they may not be able to access digital services

• Connected: using trusted third parties and individuals to perform tasks through delegated authority when a customer is unable to do so themselves

• Proactive: incorporating design into the digital development cycle to give customers choice about how they access digital services

• Balanced: ensure that the right amount of friction is introduced at the right time and through the right channel to protect customers from malicious actors without preventing them from accessing digital services.

People Sense, Social Sense, Business Sense

Adopting a new level of thinking to address universal digital vulnerability across financial services is more important than ever as the pace of digitization continues to accelerate. Helping people easily and safely access financial services is not only good for us as consumers, good for promoting inclusive finance globally, but also makes good business sense. Helping young people, adults and seniors overcome their digital vulnerabilities serves to build brand loyalty, retention and average product retention. Modern digital identity is an important building block to ensure that no one is left behind.