Bad with money or just with the wrong bank, and the UK’s new Smart Data Bill could be very smart indeed
Plus: Personal AI’s iPhone moment, the big bad wolves in the UK’s Digital Market Act, and Apple opens up NFC
Hi everyone, thanks for coming back to Customer Futures. Each week I unpack the disruptive shifts around digital wallets, Personal AI and digital customer relationships.
If you haven’t yet signed up, why not subscribe:
“The only normal people you know, you don’t know very well”.
Perhaps ‘normal’ never existed, and we accept that we’re all different in our own unique and important ways.
This matters because many businesses talk of ‘Average Jo’ - the average customer. It comes from looking at a large group of people and seeing a bell curve of characteristics.
We can identify the extremes at each end of that spectrum. And someone - our friend Jo - in the middle. And it’s around Jo that we design products and services. Hunting for Product Market Fit across large addressable markets.
Designing for the ‘average’ person makes sense in an industrialised world. When it was most efficient to bring materials and people to one place. Where the costs to customise things were astronomical.
No, it made the most financial sense to design, build and offer ‘one size fits all’. And so for the last 150 years, we have batch-cooked products, services and experiences. We have designed everything around a standard model.
This standardisation - this efficiency - has been the bedrock of business growth for as long as anyone can remember. But it’s resulted in a world where personalisation doesn’t really work. Where customers don’t have simple, easy-to-use and scalable ways to describe what they want and need.
As a result, businesses have had to guess what customers want and who they are. Why they show up, where and how.
It’s why we have digital cookies today. It’s why we have the surveillance economy. And it’s why our digital economy is so broken. It’s all manual and cumbersome. Spread out across a confusopoly of apps and websites. (Just think about the last time you booked a holiday).
But that’s all about to change with Personal AI, and Empowerment Tech more broadly.
Where individuals will be able to share rich insights about the who, how, when, what and why of being a customer. About what they need. And about their context.
And businesses will be able to respond in tailored and custom ways. Because they too will have next-generation CRM tools. Finally able to have real, meaningful and valuable conversations with customers.
Personal AI will give customers a digital voice that belongs to them. And businesses will be able to talk to them as individuals.
Finally, companies will also then see that average Jo doesn’t exist.
Or if she does, she is certainly not normal.
It’s all about understanding the future of being a digital customer. So welcome back to the Customer Futures newsletter.
In this week’s edition:
Bad with money, or just with the wrong bank?
Who are the big bad wolves in the UK’s Digital Market Act?
PSD3 ushers Empowerment Tech into finance
Personal AI’s iPhone moment
The UK’s new Smart Data Bill could be very smart indeed
… plus other links about the future of digital customers you don’t want to miss
Let’s Go.
Bad with money, or just with the wrong bank?
“You’re not bad with money. You’re just with the wrong bank.”
This is one of the best advertising campaigns I’ve seen for a while. It’s from one of the UK’s leading neo-banks, Starling.
People tell themselves stories like this all the time. “I’m someone who can’t run” Or “I’m always late”. And for those who have real difficulty with money, it feels true. Until someone points out that humans are products of their environment, too.
The people you hang out with. And the tools you use.
The tools you use.
“I’m just bad with money.” Is that true? Or rather, is that your bank has failed to make money easy?
What if it’s the same with personal data and identity? For as long as I can remember, ‘experts’ have told me that people don’t want to be in control over their data. “They certainly don’t want to have to ‘manage’ their identity”, they say.
But what if people do care about their data, but they just don’t have an easy way to do it?
What if it’s the tools they use?
In the people-don’t-care view of the world, only organisations are capable or invested enough to manage customer data. Businesses are, after all, well-positioned to do it. They are regulated and insured. They have the security and privacy experts. Or do they? We’re seeing breach after breach. Leak after leak. Personal data fail after fail.
If you ask people, of course they’ll say they don’t want to manage their personal data. But that’s because it means using a paper notepad. A spreadsheet. Perhaps a crappy ‘password manager’ app.
But neither do they want to manage their IP address. Yet their laptop and tablet does it automatically for them. Seamlessly. Quietly.
So what if the same could be true for personal data? What if individuals had an easy way to help make sure their identity data is all in order, is safe and correct?
Empowerment Tech is the breakthrough that makes it possible.
To be clear, I’m not saying that this is about making everything about ‘Self Sovereign Identity’. Demanding that there are no central records. Insisting that all cryptographic material must live on the person’s device, under only their control.
No. Businesses will be able to develop and support these services FOR and WITH customers.
But let’s ask that question again: Are you not interested in managing your personal data, or is it that you’ve not yet been given an easy, safe and private way to do it?
Who are the big bad wolves in the UK’s Digital Market Act?
The Digital Markets Act is going to have a huge impact on BigTech in the EU, especially around citizen data portability rights.
Some of the big players like Google are already getting ahead of it, and have even extended their ‘data portability’ response to UK citizens.
Now the UK Govt is getting in on the act (pun intended), with the Competition and Markets Authority (CMA) announcing a Digital Markets Competition regime.
Like the DMA, the new CMA regime will impact the BigTech companies, but only those large enough to have Strategic Market Status (SMS). That means any UK digital company with:
‘Substantial and entrenched market power’ for over five years
‘Strategic significance’ (relative size or scale), a ‘significant number of business users’, or the ‘ability to leverage its digital activity in favour of other activities’
Turnover of over £1bn in the UK (or above £25 billion globally)
So who might that be?
If you’re not yet following Tom Fish from Gener8, you should be. He’s one of the deepest thinkers where data portability meets government policy. And he’s made some predictions about who might get caught in the first wave of the ‘SMS’ net.
“Mobile native app distribution. Both Apple and Google to be designated, capturing iOS and the App Store, and Android and the Play Store respectively. It is absolutely critical that operating systems are included if the resulting conduct requirements and PCIs are to be effective.
“Search funded by digital advertising. Google to be designated for its search engine, capturing all activities relating to web crawling, indexing, algorithms, serving results, and selling and serving ads alongside the organic results. This would also include vertical search, and ads in this context should be classified broadly to limit circumvention.
“Social networking funded by display advertising. Meta to be designated with respect to Facebook and Instagram and its display advertising business, with the potential for the CMA to go broader and include WhatsApp, Threads and Messenger. I’d expect Meta to push back quite hard on this designation, and the CMA will need to work a bit harder than in its market study to demonstrate substantial and entrenched market power.
“Display advertising. Google to be designated for YouTube and the entirety its ad tech stack. Worth noting that ad tech is highly technical, and the world will have moved on a lot since the CMA’s digital advertising market study.”
I recommend keeping an eye on the Digital Markets Act, the UK’s CMA regime, and Tom Fish over the next few months. Because the BigTech players are about to open up data to their customers.
It means new competition. It means new questions about data security and privacy. And it means a big deal for Empowerment Tech.
PSD3 ushers Empowerment Tech into finance
More acronym soup from the EU, but you should be paying attention. More payments+ID goodness.
EU payments are largely regulated today by ‘PSD2’. But it’s time for an upgrade. You guessed it: PSD3.
Look closely and you’ll see some ET goodness under the hood. From Finextra:
“In 2026 the existing second Payment Services Directive (PSD2) will formally be replaced by two new pieces of legislation: the first Payment Services Regulation (PSR1) and PSD3. The European Commission’s aim is to boost payments security and level the playing field between banks and payment initiators (PIs).”
More specifically, it updates the rules for non-bank payment service providers (PSPs) in the EU. And PSD3 aims to better protect consumers’ rights and personal information. So far so food.
But - relevant for Customer Futures readers - PSD3 will now empower consumers to better, more privately and securely share their personal data. All to boost innovation and competition.
There will be six big changes, but the ET-related ones include:
‘Streamlined authentication’ - improving the checkout experience (fewer app redirections, complex authentication steps etc.) → this lands right at the heart of the Empowerment Tech opportunity, potentially using digital wallets to prove that it’s the right customer coming back
Extended IBAN checks - extending existing IBAN name check requirements → a quietly important point about knowing where your money is being sent (it’s one of the biggest gaps, and why fraud is exploding)… and where ET can step in to allow rich data sharing with the bank and sender to combat fraud risks
Improved fraud prevention - updates to liability requirements and fraud reporting (PSPs will be able to voluntarily exchange data such as the location of the user, the time of the payment, the device used, spending habits, and the merchant in question) → this is about sharing ‘more data for less fraud’, and where ET can help the customer become an active participant, not just a passive data subject
We must keep an eye on data regulations full stop. Because Empowerment Tech - digital wallets, personal AI and personal vaults - might fast become the new RegTech solution people aren’t expecting.
Personal AI’s iPhone moment?
Earlier this year, the Rabbit R1 was announced as ‘The most impressive’ AI demo since Steve Jobs’ iPhone release’. More impressive was that the quote came from Satya Nadella, CEO at Microsoft.
Just marketing hype? An actual step change in the market? Well, it’s certainly a new form factor for Personal AI.
Ever since the R1 came out, folks have been asking for my view. I usually point them to what Nadella himself later said about Personal AI:
“The relationship we all will have with computers is going to be now with an agent, which will be on all your computers. That, I think, is going to be the defining category of this next generation.”
What makes Personal AI, and the R1 specifically, exciting, is that they will run Large Action Models (LAMs). They’ll be able to understand websites, learn all sorts of on-demand things, and then be able to execute tasks on behalf of users.
This first version of the Rabbit uses PerplexityAI. Ånd you can search, play music, and order ride-shares and food. Apparently, it’s also good at note-taking and translation.
However, the first users are complaining that the AI tasks take too long. That the battery runs out. And the recommendations don’t really work. But the iPhone1 was terrible too. So too was the Apple Newton.
Might it be better to just add these features to my smartphone? Maybe. But there’s a new interface here, and it’s coming at a time when many folks want to spend less time on their devices. An AI-powered, voice-controlled handy device could be the way out.
Yes the R1 is early. But it does point to some very ET-flavoured tech for the individual. A personal AI will be able to join the dots across our digital lives, and has the potential to transform everyday tasks, for everyday people, every day.
The UK’s new Smart Data Bill could be very smart indeed
The UK Government has finally caught up with the rest of the modern digital world, and announced an updated ‘Smart Data Bill’.
It includes plans for “the secure sharing of a customer’s data upon their request, with authorised third-party providers”. Also, new “digital verification services”.
Both are promising, specifically around more expansive data portability (moving beyond just Open Banking), and around digitally verifiable identity data.
The new UK Government will apparently “support the creation and adoption of secure and trusted digital identity products and services from certified providers to help with things like moving house, pre-employment checks and buying age-restricted goods and services”.
Room for verifiable credentials, do you think? Perhaps a digital wallet or two? It all looks and feels like an Empowerment Tech opportunity to me.
We’ll just have to see if the Smart Data Bill ends up being as smart as I hope it can be.
OTHER THINGS
There are far too many interesting and important Customer Futures things to include this week. So here are some more links to chew on:
News: US Department for Homeland Security (DHS) awards 6 startups with Empowerment Tech contract READ
Research: Digital Identity in Germany: State of Play in mid-2024 READ
News: Apple allows 3rd party applications in the EU to access NFC READ
Insight: Generative AI and Competitive Advantage READ
News: Google Wallet takes next step with US biometric passports READ
And that’s a wrap. Stay tuned for more Customer Futures soon, both here and over at LinkedIn.
And if you’re not yet signed up, why not subscribe: