If you are feeling discouraged by the changes brought on by the COVID-19 pandemic, there is hope for a return to life as we once knew it. Adam Alter, a psychology professor at New York University’s Stern School of Business, said on CBS Sunday Morning, a U.S. weekly television show, that changes made under duress rarely last. Over time, life usually gets back to “normal.”
But, some changes, especially those related to the leapfrogging of digital technologies and the resulting behavioral adaptations necessary to fuel change, will remain. Digital transformation has accelerated because of the pandemic, with many businesses jumping over interim, good enough for now solutions to embrace next generation technologies.
From cashless to contactless
The first bank card, Charge-It, was introduced by a Brooklyn, NY, banker in 1946, while Barclays in London issued the first debit card in 1987. PayPal’s decision to create a digital payment platform occurred over 20 years ago. But now cash is rapidly losing significant ground to the convenience of plastic, with some countries like Sweden and India far ahead of other regions.
COVID-19 has accelerated the adoption timeline however, said Greg Swanson, operations director for UL’s Identity Management and Security division. “With COVID-19, contactless payments are becoming a bigger demand driver for players in the smart payment ecosystem,” he said. “Many merchants are focused on eliminating the physical handoff of credit and debit cards from an individual buyer to a merchant or retailer.”
But, it’s not only merchants who are looking for new solutions to protect people against the novel coronavirus. Consumers, concerned with the increased risk of community spread transmission, view contactless and digital wallets as safer alternatives to the traditional methods of in-person transactions. Mastercard’s interview of 17,000 people from 19 countries confirms the transition — 46% have swapped out their top-of-wallet card for one that offers contactless payments.
Bottom line? Newer technologies designated as “someday” have become “right now.” Regulations and standards that were still under development when the pandemic hit have moved from a 12 or 18-month timeline to just a few months.
Beyond payments, the demand for contactless digital identity documents has also increased due to COVID-19. Simple actions such as handing over a passport or driver’s license are causing concern amongst government officials — no one wants to handle physical documents if there is another alternative.
Department of Motor Vehicle visits to update personal information would also decrease with the adoption of digital identity documents. Moved to a new home or acquired a new name through a marriage? No problem. The digital nature of the identification means that individuals could update information remotely — less face-to-face contact equals fewer transmission touchpoints.
Digital identity applications extend beyond governmental use and issuance, though. In a world that is more aware of disease transmission, any activity that requires the presentation of identification cards could apply.
For example, activities such as supplying proof of insurance in the U.S. or age verification checks performed by convenience stores would fall under non-governmental use cases. Verifying a person’s identity when applying for a loan or closing a financial transaction — activities now performed virtually due to COVID-19 concerns — would also benefit from digital identity documents.
Mobile identity standards, the first step to building trust into digital credential adoption, have been under development for several years. As with contactless payment solutions, digital credentials are now viewed as even more important to stakeholders.
“Contactless transactions, whether boarding a flight or paying for groceries at the supermarket, will help us resume normal activities in a safe and trustworthy way,” said Arjan Geluk, lead principal advisor in UL’s Identify Management and Security division.
Bottom line? Everyone wants to minimize physical interactions through automation. Work to harmonize proposed standards and build trust into digital identity documents is moving full steam ahead.
Connected devices are everywhere and in (almost) everything. According to one estimate, industry experts expect the number of connected devices worldwide to jump 12% on average annually, with 125 billion devices in use by 2030.
The Internet of Things (IoT) promise, with its touchless functionality, has intensified as a direct result of the pandemic. The market for smart gadgets — those activated by voice or smartphone app, such as speakers, appliances, thermostats, faucets and even smart door locks — will outpace pre-pandemic expectations.
Organizations, such as UL, with decades of cybersecurity experience and a rapidly growing IoT security practice, have seen an increased need for companies to use technologies once viewed as ‘nice to have’ in the past. Practically every industry wants to utilize IoT technology, which is the underlying connector for everything “smart,” to decrease their risk.
“The feedback we’re gathering from absolutely every industry is that there’s going to be an acceleration and reprioritization of their digital initiatives,” said Isabelle Noblanc, vice president and general manager of UL’s Identity Management and Security division.
Bottom line? Digital strategies are moving forward much faster than companies were planning on before the crisis. Prepare yourself now for accelerated growth as more organizations embrace IoT solutions to help protect their employees from transmissible diseases.
But can we trust it?
Security and privacy concerns continue to drive media reports, regulatory discussions and consumer confusion. Some relevant statistics underscore the problem:
- 59% of organizations surveyed for UL’s IoT study find compliance with security regulations complicated (UL IoT study)
- 81% of the public say that the potential risks they face because of data collection by companies outweigh the benefits with 66% saying the same about government data collection (Pew Research Center)Only 22% of U.S. consumers described mobile payments as “well-protected” (Pew Research Center)
- More than half (59%) of people who regularly use voice-powered devices have concerns about privacy (eMarketers)
- The average amount of time that it takes a bad actor to attack an IoT device once connected to the internet is five minutes (NETSCOUT’s Threat Intelligence Report)
- 76% of risk professionals think IoT leaves them at risk of cyberattacks (Poneman Institute)
- 88% of identity theft reports were due to credit card fraud (Federal Trade Com)
Bottom line? Consumers, businesses and organizations may see a bright future for advanced digital solutions such as contactless payments, identification and IoT devices. Still, security concerns could hinder the rapid deployment and adoption of these technologies.
Stakeholders need to understand and address these concerns to increase adoption and build trust in contactless products. Prioritizing cybersecurity and data privacy are excellent first steps but building trust through action — and demonstrating that action to the marketplace — is needed for sustained growth.