The Economist Events’ A whole new (contactless) world: The rise of digital identity, sponsored by Onfido, took place on December 8th and 9th 2020. The virtual event was chaired by senior Economist editor Kenneth Cukier. It was a timely discussion to understand how covid-19 has accelerated the transition to a digital-by-default world, turbocharging digital-transformation agendas. Indeed, companies no longer think of it as digital transformation, but simply as business transformation. This is itself a huge paradigm shift. Contactless is fundamentally reshaping our world and is set to be one of its underlying features from now on. In 2020, as virtual replaced physical, we got a front seat to the challenges and opportunities at play in this transition. The event convened a global cohort of speakers to reflect on it.
Recordings from all sessions are available to view on-demand here.
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- Banking on the future: Financial services, reimagined
- Voting for progress: The future of digital democracy
- Faceless criminals: Securing data and privacy
- Taking flight: The future of travel
- Leisure and entertainment in the post-covid-19 era
- Healthy systems: Improving access to health care
- The future of work
It is no exaggeration to say that in 2020 five years’ worth of digital transformation has taken place. Digital banking has made huge gains and society at large is benefiting. The shift away from analogue enables transactions to happen at a fraction of the time and cost, and the ripple effects are huge. There is also enormous potential to make financial services more customer-centric and personalised. The panel unanimously identified regulation as a big barrier to innovation.
For Asheesh Birla, general manager of Ripple, forward-thinking policies are key to levelling the playing field.
Where regulation for digital assets is clear, companies are adopting technology faster than ever. But the picture varies greatly from country to country, and is constantly evolving. Alice Fulwood, finance correspondent, The Economist, was keen to unpack this. Any technological change, the panel agreed, needs to go hand in hand with bigger shifts in socioeconomic and political mindsets. This holds true especially in emerging-market contexts. Mike Tuchen, chief executive of Onfido, highlighted that worldwide two billion people are unbanked.
There is clearly a gaping business opportunity to tap into this market by applying non-traditional cost structures—society often fails to acknowledge that payments cost money and hence exclude potential customers. Under President Joe Biden postal banking might even make a comeback. Mr Tuchen also flagged the ethical issues around algorithmic bias and facial recognition and the need to address these if we are to make banking products universally inclusive.
When asked whether digitisation had improved accessibility to financial services and levelled the playing field, 81% of the audience agreed and 19% disagreed. Looking ahead, the panel agreed that a country’s successful track record in digital transformation is not always a pre-condition for future successes. Often, emerging markets are better at leapfrogging, while more advanced counterparts are plagued by the friction of legacy systems.
Today citizens demand unprecedented innovation from their governments. After all, they receive comparable services from the private sector in more convenient ways. This raises the bar, and in response both are increasingly teaming up via partnerships for the benefit of the consumer. Among the audience members, 65% believed the imperative to digitise government lies squarely with government itself, while 18% respectively said international organisations and the private sector should also be driving the charge. Digital identity is at the heart of e-government and hinges on safe and secure authentication, as well as cyber-security more broadly.
For Jan Neutze, head of the Defending Democracy Programme at Microsoft, solutions like “Election Guard” are hugely consequential. Estonia—where close to 100% of government services are available online—is the poster child for this movement. The perk of being a small country is being able to be a testing ground for innovation. But building public trust and shifting mindsets is an uphill battle. There was consensus across the panel regarding the underlying imperative to make voting easier, as strict voter restrictions essentially disenfranchise populations.
Sheila Nix, president of Tusk Philanthropies, stressed the link between e-voting and improved turnout.
She warned, however, that governments are frequently reluctant to change the status quo for structural reasons such as funding, security and education. Vincenzo Aquaro, head of digital government at the United Nations, was insistent on not oversimplifying the relationship between e-government and inclusivity, because it is plagued by the connectivity gap between the haves and have-nots and can therefore exclude large segments of the population.
The work-from-home mass experiment has put millions of dollars in the balance. Employees are now working off often insecure networks and putting company data at risk. Breaches and hacks are costly: not just financially, but also in terms of reputational damage. Everyone is now a potential target against the backdrop of an ever-evolving threat landscape, with AI and other technologies being leveraged to scale attacks. At the height of the pandemic Lakshmi Hanspal, global chief security officer at Box, had to help clients pivot their business models to adapt to new normals overnight. As she put it, there needs to be local assurance and global acceptance of safety protocols. Ms Hanspal further emphasised the role of contactless identity to protect the integrity of transactions in a virtual world. The question is, do we have systems in place with built-in margins of risk tolerance?
From the audience’s perspective, the biggest barriers to the general public buying into a contactless world are privacy and security concerns (47%), misinformation (22%) and lack of digital skills (31%). Mr Cukier highlighted the importance of educating all stakeholders, particularly everyday people, to make these transitions as frictionless as possible.
The pandemic has turned the industry upside down and is ushering in a new age of digitisation. Expedia is investing heavily in “click and cancel” and Sidehide is pioneering contactless technologies and experimenting with immunity passports. The disruptions are fundamentally reshaping the ecosystem. We should see this as a positive change, one which will make customer experience ever more seamless.
In the opinion of Ariane Gorin, president of Expedia Business Services, there will be no return to pre-covid-19 travel levels until the vaccine enables populations to achieve herd immunity.
She echoed Bill Gates’s grim predictions about the future of business travel. When it does return—and there is a clear economic imperative to make sure it does—it will look very different to customers. A big chunk of experimenting with new technologies is also happening in the form of virtual travel. Simon Wright, industry editor, The Economist, highlighted the significance of this from an environmental perspective. According to Laurent Gaveau, head of the lab at Google Arts & Culture, museums were able to hit the ground running and monetise the marketing opportunity because they had already digitised their collections. Tarik Mohamed, co-founder of the Collective Overview, is also excited for the long-term potential of augmented reality to create hybrid tours and improve the traveller experience. The audience backed this sentiment, with 93% confident that in a post-pandemic world virtual reality would complement brick-and-mortar travel. Just 7%, however, reckoned virtual reality would become irrelevant.
Miranda Johnson, The Economist's deputy executive editor, was fascinated to hear how necessity and confinement to the four walls of the home have driven innovation during the pandemic. A poll of the audience found that in a time when businesses had to adapt or die, 33% believed that fitness, 28% restaurants and 39% television have cracked the code to leisure and entertainment 2.0. Joan Murphy, chief executive of Frame, explained how her company launched its on-demand platform in beta stage—something that would previously have been unimaginable. Daniel Danker, senior director and head of delivery product at Uber, threw out the rulebook and got creative with execution to deal with the backlog of tens of thousands of new merchants on the platform. Even the CTO got his hands dirty in the back end. They made mistakes, but decided what parts of the quality-control process needed to be prioritised.
The same held true for Headspace, which strove to provide free access to their app in specific countries to health-care workers and those made redundant or furloughed. All of these players predict that the pandemic’s impact will outlive it. Based on Headspace’s enterprise business and a 500% increase in inbound inquiries, Megan Jones Bell, the company’s chief strategy and science officer, believes the pandemic has transformed how seriously the C-suite takes mental health. According to her, this represents an acceleration of five years at least. Mr Danker, meanwhile, believes the use of contactless technologies will persist throughout the supply chain. He also credits covid-19 with mainstreaming the notion of delivery, broadening it from just takeaway food from restaurants to groceries and now prescription pharma. The panel agreed on the invaluable role of word of mouth in times like this for reputation-building.
The question posited by Slavea Chankova, health-care correspondent, The Economist, and her panel was whether the equivalent of what Google has achieved can be done in health care. The sector lags in digitisation, and roadblocks include a highly fragmented ecosystem. According to Ali Parsa, chief executive of Babylon, we currently do “sick care”, not health care. The paradigm needs to be fundamentally rethought and empowered with data and new technology. Covid-19 saw digital thrown at patients at an unprecedented rate, says Sarah Wilkinson, chief executive of NHS Digital. There is consensus that customer expectations have adapted and won’t go back when brick and mortar returns. The audience agreed, with 91% believing telehealth and other digital products will outlast the pandemic. Health care is plagued by issues of accessibility and affordability. Digital health care can help with this and make it more patient-centric, but conceptually we should be thinking of it simply as “health care”. The breakthroughs witnessed in 2020 stem from the waiving of regulations that will now need to catch up.
There has also been collaboration across competitors in previously unimaginable ways. Jereon Tas, chief innovation and strategy officer of Philips Healthcare, illustrated this with the case of ventilator shortages. He is confident this legacy is also here to stay. The preoccupation will now be on building up secure and scalable data infrastructure and improving interoperability across countries, while adhering to international standards.
Companies have divorced themselves from the physicality of location. Work is no longer a place. In the new geography of business, tomorrow’s workplace will be what Anne Chow, chief executive of AT&T Business, coins “phygital” (a hybrid of physical and digital). This is here to stay as companies rethink business models. When Vijay Vaitheeswaran, US business editor, The Economist, polled the audience on what technology they believed would be most impactful in shaping a “phygital tomorrow”, 27% voted for 5G, 53% IoT and 20% Edge computing. But it is imperative, he noted, that we pay attention to the adverse impacts these developments have on specific demographics—minorities and women, for example, as well as recent graduates who are new to the workforce. There is great truth to the statement that “social distancing” is a serious misnomer—it’s merely physical distancing. This year technology is single-handedly underpinning the social fabric in- and outside the workplace.
As Mike Tuchen, chief executive of Onfido, closed the event, the key takeaway became clear. In 2020 humanity finds itself at a juncture as significant as the Industrial Revolution. Against the backdrop of covid-19, technology is colliding with and accelerating socio-economic and political change in unprecedented ways. By 2030 digital identity will be at the core of 30bn products that didn’t exist pre-covid-19. We should pause to let the magnitude of that sink in. As we operationalise the mandate to “build back better”, we need to ensure these products are designed by and for the full spectrum of stakeholders. For now, the digital divide—the gap between the haves and have-nots in terms of connectivity—threatens to undermine technology’s unique potential to level the playing field. How successful we are in overcoming this will define the viability of tomorrow’s contactless world.
Recordings from all the sessions are available to view on-demand here.