Customer Futures Stories: What if browsers are the Next Big Thing, digital obsession is killing customer service and Apple opposes encrypted messages

Hi everyone, thanks for coming back to Customer Futures.?

Each week I unpack the ever-increasing and disruptive shifts around Personal AI, digital customer relationships and customer engagement.

This is the weekly STORIES edition. Covering the important, and sometimes less obvious, updates from the market.

If you’re reading this and haven’t yet signed up, why not join the growing number of senior executives, entrepreneurs, designers, regulators and other digital leaders by subscribing now .

?? STORIES THIS WEEK

I’ve written for a while about AI and digital trust. And explored where things might go over the next few years. Here’s another prediction: within 24 months you won’t know if the other person on Zoom or Teams is real or not.?

Two things will happen as a result:

First, trust will shift to the collaboration platform (‘are you really signed in?’), plus your device (2nd factor or biometric login etc.)…?

And second, apps with embedded digital wallets will become our?companion tools. For us to ‘check-in’ to digital experiences (like login, but for?real-life interactions).

In other words: Most think that digital wallets will happen because they are better/ smarter/ more decentralised than the tools we use today.?

But digital wallets will more likely happen because we’ll need to prove it’s really us.?

Everywhere.?

And that only becomes possible if it works?anywhere. So a new multi-platform-mega-super-app won’t cut it. It won’t scale to?my whole life.

But my own digital wallet app, based on open standards like the internet, just might.

Welcome to the future of being a digital customer. And welcome back to the Customer Futures newsletter.

In this week’s edition:

• The race for identity verification is on… how will Generative AI make an impact?
• Junk websites filled with AI-generated text are screwing paying advertisers
• Deceptive patterns (AKA dark patterns): who benefits from friction in user journeys?
• What if browsers are the Next Big Thing?
• Digital obsession is killing customer service
• The customer benefits of open banking - and open data
• … plus other links about the future of digital customers you don’t want to miss

Let’s go.

The race for identity verification is on… how will Generative AI make an impact?

Two huge themes of the moment: Digital Identity and Artificial Intelligence. Put the two together, and things get pretty nuts, pretty fast. Fake reputations. Fake biometrics. Generative Personal Data. New identity data flows and privacy questions about what data is passed to which LLM platform, how and why.

Unusual Ventures has taken a swing at understanding what happens when ID+AI collide:

“Given the rise of Large Language Models (LLMs), it’s only a matter of time before they could significantly disrupt the field of identity verification. LLMs could be used to analyze and interpret various forms of identity-related data including documents, images, and biometric information to detect potential fraud or discrepancies.?

Many fintech startups in the application layer have initially focused on automating the compliance and regulatory documents and processes that are required. LLMs can also much more quickly process and cross-reference large datasets that can be used to identify patterns and anomalies that may indicate fraudulent activities. This can be done through the automation of the verification process that can reduce the need for manual review and expediting the overall procedure."

READ

Junk websites filled with AI-generated text are screwing paying advertisers

The latest sub-prime crisis? It’s fake (AI) ads on fake (AI) websites, soon with fake (AI) eyeballs.?

The mortgage crisis of 2007 happened because we couldn’t track the debt. What assets were really behind what debt instruments.?

The same is happening with digital ads. 70 years ago on Maddison Avenue, they used to joke that “over half my advertising is wasted. But I don’t know which half.” That was back when customer messaging was about?brand advertising. When it was about?signalling.?

Not about individual ad tracking like it is today. As advertising shifted over to digital - to hyper-personalisation, to surveillance and to ‘markets of one’ - it all got confused. Messed up. And conflated with ‘digital marketing’.?

Over and over again it tripped over the privacy line. And of course, the clumsy line, selling me stuff I already had, or didn’t need.

The supply chain for digital ads exploded into a wild west of flimsy ‘MarTech’ platforms and hyper-speed digital ad exchanges. And we lost track of, well, everything.?

Including what ads were really being presented where, to whom, and how.?

We’re now in a so-called age of “real-time content” produced by AI. And in theory, they claim, a tailored ad impression for each and every customer.?

So it’s become inevitable that digital fraud would rocket. We now get to enjoy?next-gen content farms. It’s now estimated that over 20% of ad impressions are going to made-for-advertising sites. That’s insane.?

$13 billion is potentially now wasted on these types of fake sites each year. When on average it costs about $1.20 to place a thousand ad impressions… and when they are discovering thousands of fake websites all the time… it’s clearly an enormous business for fraudsters.?

Surely it’s now only a matter of time before the digital ads house-of-cards collapses under its own weight?

So-called ‘Junk Websites’ might just become a tipping point. Technology Review digs into what’s going on:

“Over 140 major brands are paying for ads that end up on unreliable AI-written sites, likely without their knowledge. Ninety percent of the ads from major brands found on these AI-generated news sites were served by Google, though the company’s own policies prohibit sites from placing Google-served ads on pages that include “spammy automatically generated content.”?

“The practice threatens to hasten the arrival of a glitchy, spammy internet that is overrun by AI-generated content, as well as wasting massive amounts of ad money.

“Most companies that advertise online automatically bid on spots to run those ads through a practice called “programmatic advertising.” Algorithms place ads on various websites according to complex calculations that optimize the number of eyeballs an ad might attract from the company’s target audience. As a result, big brands end up paying for ad placements on websites that they may have never heard of before, with little to no human oversight.”

READ

Deceptive patterns (AKA dark patterns): who benefits from friction in user journeys?

I’ve been cooking on the ideas around ‘Good Friction’ for a while now. In some ways, it becomes controversial to say that good experiences should take?longer.

Because there’s something about human timescales. We don’t trust things that happen too fast. Like ordering food at a restaurant: if the plates come out of the kitchen too soon… it doesn’t quite feel right.?

Should you be able to buy a life insurance policy in just four taps? Or rent a car with a complicated insurance waiver in under 30 seconds?

We can all tell when there’s a change in the rhythm of a customer journey. Perhaps checkout is full of clumsy, lengthy forms to fill out… but then it switches to an innocent checkbox to proceed. Placed gently next to the pay button is a hyperlink, pointing to a long document they don’t really want you read.

Ask yourself: who is benefiting here? Ray Newman has come up with a simple model to describe what’s really going on:?

“Another way of thinking about deceptive patterns (AKA dark patterns)… is who benefits from friction in user journeys, or its removal?

“That is, deliberately slowing the user down, or, conversely, making it easier for them to slide through the process. An example of good friction, tested recently by a couple of my colleagues, is adding an otherwise unnecessary loading/calculating animation to a medical tool.?

If users are made to wait a few seconds for their medical result, they trust it more. If it appears instantly (which it absolutely could) they don't take it seriously.”

Ray’s conclusion is that Good Friction can be digital lubrication. It benefits the user?and?the business. But deliberate?Bad Friction?always only benefits the vendor.

RAY’S POST ,?NEWSLETTER ON ‘GOOD FRICTION’

What if browsers are the Next Big Thing?

Today we can’t trust data that moves around. Especially personal data. It’s the reason we have to do a little password dance with every website, app and device to access our apps and services.?

Or to provide nine different pieces of personal data in five different ways using two different devices… so that the business can trust that it’s really us. It’s why interactions with businesses are still enormously manual. Fragmented. Broken.?

‘Browsers’ were originally for ‘surfing’ the ‘information super-highway’. It was a?place to go.?Now they are often just clunky interaction booths. Where we awkwardly shuffle from form to form, from site to site.

Honestly, it doesn’t feel like?browsing?any more. It feels more like?digging. All those forms and clicks and scrolls giving us repetitive strain injuries. Like working on a farm in the 1800s, breaking our backs and turning over the earth with forks.

With digital wallets though, rather than manually loading our personal data from place to place, our identities can be baked into the places?we already are.?

We’ll be able to prove anything about ourselves. Instantly, to anyone. It will all be part of our?existing?experiences. Our?existing?apps, and in our browsers.?

Fintech talks about?embedded finance. I think the coming wave is about ‘embedded identity’.?

And it won’t feel like digging. Or browsing.?

It will feel more like?swimming.?

With digital experiences and information flowing much more naturally around us. Under our control. Transparently and quietly helping us manage who we’re interacting with, and how.

If we get it right, and our data becomes more portable, private and permissioned, embedded identity will be transformational.?

And an opportunity for today’s ‘browsers’ to reinvent themselves. Theo Priestly puts it well:

“Browsers will be the next big thing. Between WebXR, WebGPU, streaming media, streaming games, the interwebs, it's more than likely that a different browser war is brewing.

Many are trying to build the everything app from one particular direction, whether it's from your banking app, a social network, messaging, maps but I haven't seen anyone discuss the browser because we take it for granted and don't treat it like an app.

A portal to the spatial world sits inside one, we sign in via one, it could in fact be the custodian to our sovereign data and identity as a decentralised wallet. But then, it's just a browser...”

READ

Digital obsession is killing customer service

Aarron Spinley is one of the world’s leading thinkers about digital customer experiences. He writes brilliantly about how businesses are obsessed with ‘digital’, and why it’s killing customer service.?

He was recently interviewed about his latest excellent insight report. Everything today is about the sale, he writes, and there’s no interest in solving real customer problems. It’s a must-read:

“Part of the problem, he says, is that as neither marketing or customer management have barriers to entry, both lack consistent professional discipline. As a result the spread of marketing-based digital tactics has degraded customer operations.?

“There has been a marked increase in CX investment from major brands all around the world as it relates to the technology, yet outcomes for customers are worsening,” Spinley said. That should tell us something. Research shows consumers are incredibly annoyed by pushy sales interventions, comically bad chatbots, soul destroying call centre wait times, and an inability to get things done quickly and easily”.?

Spinley says it is foolish to assume that technology can be applied as effectively to a relatively nascent discipline like digital marketing with the same efficacy it can be applied to other parts of business. "In the industrial space you are applying technology to well understood and well tested work processes created over years. In digital marketing they are just throwing whiskey all over the floor."

READ

The customer benefits of open banking - and open data

There’s a lot of excitement about ‘open’ data. By which I mean accessible data. Portable data. Including regulations to ensure customers can get access to copies of their personal information currently locked up by business.

‘Open Banking’ is a whole thing. The ideas and policies have been around for a few decades. But it's now being implemented through regulation and with gusto everywhere. At last count over 50 countries are getting in on the action. From Australia to Germany, from the US to Saudi Arabia.?

On one side it’s transforming how payments are made. But it also twists the arms of banks to release customer data to approved 3rd parties.

It’s very exciting. But it raises difficult questions about identity. How do we know it’s really you asking for the data? Precisely?how?do we move the data around? And?where does it go? Under what?rules? Who is liable when it goes wrong?

The opportunities for smarter, faster, better payments is pretty obvious. It removes friction and is way more convenient for customers. And for businesses, it improves things like conversion.?

But why all the excitement and fuss about?data sharing?- giving copies of data back to individuals? Mainly, they argue, because of?competition. Because of consumer rights and?switching. Because, well, ‘innovation’.?

The difficulty is that these are all what Doc Searls calls?‘because effects’. They happen ‘because’ you have portable data. But it’s not a guaranteed outcome.?

Which makes the case for open data, like open banking, challenging. Much like it’s difficult to make the business case for meeting rooms in an office. Or bridges in a city.?

Exciting and valuable things happen?because?of meeting rooms and bridges. But it’s hard to pin down the exact ‘return on investment’.

Smarter, faster payments, yes. But why on earth would a business openly want to share customer data? Why would they invite other companies - including their competitors - to access their most precious asset, customer data??

The answer is that they wouldn’t. In fact, they’ll more likely actively block it. Because Open Data costs money to implement. Because it raises thorny problems about fraud and liabilities. And quite frankly because most customer data platforms and systems are expressly designed?not?to share data.?

And so while regulators, policy folks and innovation leaders?love?the idea of open data, incumbent enterprises are more cautious.?

But on the customer side, it’s becoming clear that open data - and open banking - is very helpful indeed. It means they can better deals. And, it turns out, better overall financial outcomes.?

In a recent study in Germany into the open banking ecosystem, Rachel J. Nam found that:

• Data sharing improves loan approval rates - by nearly 10%
• Data sharing reduces loan rates - by 2%
• Standard credit variables matter less with data sharing
• Open banking and data sharing lead to positive loan application outcomes on the intensive/extensive margin…Particularly beneficial for borrowers with thin credit files
• Low credit rating borrowers are more likely to share data

Putting the smarter, better payments part of open banking to one side, this research points to the huge value opportunities to be explored for customers.?

When people can control their personal information. When they can use their data for things that matter to them. And when they are empowered to decide what they share with whom.?

Because this isn’t just going to happen in banking. It will be coming to other sectors soon. As Marie Walker, open banking expert puts it, “Banking isn’t special. It’s just first”.

READ

?? OTHER THINGS

There are far too many interesting and important Customer Future things to include in this edition. So here are some more links to chew on:

• Microsoft and OpenAI sued for $3B after allegedly trampling privacy with ChatGPT?READ
• From chatbots to connections: How AI will change services?READ
• Australia’s “National Strategy for Identity Resilience” - including digital wallets?READ
• EU Parliament strikes a deal on a European digital identity (eID)?READ
• Privacy Policies across the Ages: Content of Privacy Policies 1996–2021?READ
• Three-Sided Digital Mortgage Market?READ
• Apple joins opposition to encrypted message app scanning?READ
• The man behind Alexa’s voice on what AI can, can’t, and shouldn’t do?READ

And that’s a wrap. Stay tuned for more Customer Futures soon, both here and over at?www.customerfutures.com .

And if you enjoyed this, you can?subscribe now .