Customer Futures Newsletter: Digital wallets are the new accounts

Plus: ChatGPT for Me, The AI Dilemma, The arms race in AI will be access to data, and much more...

Hi everyone, thanks for coming back to the Customer Futures Newsletter. Each week I unpack the fundamental shifts happening around the future of digital customer relationships, personal data and customer engagement.

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Quick note this week: This newsletter is about learning in public. About sharing new perspectives and asking new questions. So please do feedback on what’s working/not. Too long? Short? More links? What’s missing? Do reply and let me know!

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IDEAS

Digital wallets are the new accounts

Most people are wrong about digital wallets. 

Well, they are right, but they are missing something. Something huge. 

When the web browser was first launched, it was considered a new consumption channel. A window into the information super-highway. To view. To browse. To ‘surf’ exciting new web pages and digital content. For reading digital articles and e-magazines. For accessing online TV and digital radio. 

Browsers became the new battleground to compete for consumers, attention and eyeballs. The ‘browser wars’ soon broke out.

But most missed the real shift to come. That browsers and the web would soon turn into the world’s largest publishing platform, completely changing the way we live, work and play.

The same is happening with digital wallets today.

The Web3 crowd say digital wallets are about transferrable digital assets and ownership without a central authority. And they are right.

But there’s more. 

Many payments and identity experts will say that digital wallets are really about identity. Proving who you are and what you are entitled to do (tickets, access). Maybe even with fancy selective disclosure features.

They are also right. But that’s not the whole picture.

A pioneering group of others believe that digital wallets are really about the portability of any verifiable information, and digital authenticity. 

And they too are right. We’re now getting much, much closer to what I’m talking about.

But there’s still more. 

Once individuals can show up independently, with their own digital tools - digital wallets with verifiable, data, identity and digital assets - then we have something new, something special.

It’s a New. Customer. Channel. 

Once a business asks for some data from a customer’s digital wallet, they have the opportunity to form a new digital connection with that customer.

A persistent one.

A verifiable one.

A private one.

An auditable, secure and intelligent one.

My goodness, what business wouldn’t want that? Imagine plugging that connection directly into business systems and processes like CRM.

Yes, digital wallets can hold and manage assets. And identity. And portable, verifiable, authentic data.

But with the narrower ‘data and assets’ framing, we risk missing the larger market opportunity. 

Digital wallets become the new account.

For everything. 

OK so what is an account?

With money, it’s a shared and trusted record of all your transactions. Who did what, who paid what, and who owes who.

With business, it’s a shared record of all your products and interactions. It’s a critical customer channel and interface. The place people come to check things. To ask things. To ‘do business’.

Each customer account has a number. A unique identifier. It has a way to message customers. A way to record what’s been sent to, and received from, the customer.

Ring a bell?

Digital wallets will be able to do all this and much more.

But they will also be more secure. More private. More flexible. And more portable.

So it’s possible - I’d even argue more likely - that digital wallets may be more disruptive than browsers were in the 1990s.

But like browsers, they will first be misunderstood.

Digital wallets will become the new account.

For business? For government? For banking? For health? For travel?

For life.

I have said for over a decade that the only 360° view of the customer, is the customer. 

Just imagine, once a customer can bring their own wallet - their own account - to each business:

• The economics change. Why would a business maintain a complex and proprietary account platform when digital interactions can be handled - indeed automated - via a verifiable digital wallet that’s available on every smart device?

• The data flows change. Why would a business store unnecessary customer data when they can just ask for it on demand, with consent, from the customer’s digital wallet? Then delete it again once used?

• The risks change. What if we could reduce fraud and account takeover to near zero, when every customer interaction has to be authenticated via the customer’s digital wallet (likely with biometrics)?

The very fabric of the customer relationship changes.

This is just a glimpse of what‘s possible, and what’s coming.

Over the coming weeks, I’ll be writing about how digital engagement is going to fundamentally change once digital wallets arrive on the scene, and at scale.

And how, when you look closely, digital wallets aren’t even the thing. They are ‘below the surface’ of the customer channel.

But more on that next time.

For now, it’s a simple switch: when you hear ‘account’, just think ‘wallet’.

JS

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STORIES

Why LinkedIn needs verifiable job histories

A perfect case study on why Microsoft should be racing to offer us all verifiable CVs. It seems obvious. They already operate the email address service for millions of companies worldwide. But less obviously - yet perhaps more importantly - Microsoft are one of the largest and most vocal champions of implementing Verifiable Credentials. (They also own LinkedIn). LINK

Ticketmaster uses credentials to gate access to tickets

Following Spotify’s lead, who are exploring gated access to streaming with NFTs, Ticketmaster has just introduced restricted ticketing for those with NFTs. Both projects signal the very start of the unbundling and disruption of Fan Relationship Management (FRM). Let’s consider this a ‘v1’ of the future, given it’s using NFTs. I predict that platforms will soon switch over to the more privacy-preserving and customer-friendly Verifiable Credential tech option. Not least because it will be much easier for enterprises to adopt and scale. SPOTIFY, TICKETMASTER

ChatGPT for Me

Rewind.Ai recently demoed a new personalised AI tool for customers. But this time its trained on a user’s own personal data, all on-device. The pitch: ‘What if you had perfect memory?’ This is just the start of an inevitable slide towards sharing vast amounts of personal data in exchange for exciting digital services. But it’s also the starting gun for the coming regulatory backlash. What data is sent where? What data and what processes can be trusted? Who gets to vet the models running over the data? Italy is already out the gate banning ChatGPT on privacy grounds. But things get very interesting once we can run a complete AI model on the device itself (coming very soon at scale). REWIND, ITALIAN BAN, ON-DEVICE LLM

The AI Dilemma

A must-watch video by Tristan Harris and team on why this is a much larger moment for AI than any of us realise. Sometimes you read or watch something that changes your perspective forever. This is one of those times. AI will be like climate change: we can't see the exponential change right in front of us. But this time it's Digital Warming. Is the toothpaste already out the tube when OpenAI offers ChatGPT APIs? GPT won’t just chat, it can now ‘do’. AI DILEMMA, CHATGPT

The next frontier of customer engagement will be AI-enabled

Predictably, one of the first uses of AI in the enterprise will be customer engagement and customer support. Why? Because it all sucks right now. And much can be digitised and automated. But this piece misses the real disruptive opportunity: when customers themselves automate the process on their side. When MY AI interacts with the business’s AI. Automatically, seamlessly, auditably. All while acting in MY interests. LINK

A wallet standard

The new ‘Open Wallet Foundation’ is proposing an open-source digital (identity) wallet standard. This is an important movement and has the potential to avoid issues with enterprise lock-in, as the wallet market matures. As I’ve said for years, ‘businesses should lock in for value, not for data’. This of course all needs to be aligned with the EU’s coming eIDAS digital identity wallet (itself a complexity of competing standards, features, privacy questions and approach). OWF, eIDAS Wallet

EU limits "anonymous" digital asset wallets

With cash, you can move it around anonymously. That’s the point. But as a society, we’ve agreed that if you want to transfer lots of cash, then the bank should probably start asking for some identity information. As money moves into digital wallets, so do the regulations, and this is no exception. LINK

How to hack the AIs scraping your data

This is a smart little story about how AI processes personal data that’s been scraped from public profiles. What if you add a little salt to your profile, hidden from view, but readable to AI? How might that show up in the training data and the AI responses produced? It’s a fun example but tells a broader story. How do we know what data came from where. What are the inputs? Perhaps there’s a future where all data carries verifiability? And yet again we get back to authentic data. This will become a big theme this year and next. LINK

The arms race in AI will be access to data

AI models need data. Lots of it. And the better the data, the better the outputs. Bard, GPT and the others have already been trained on the open web. Wikipedia. Websites. Youtube. (And even on each other, a kind of ‘AI Cannibalism’, though Bard denies gobbling up OpenAI responses). So it’s predictable that companies are now building data moats, and planning to charge AIs for access to create highly efficient models and specific data sets (think pharma, police, inventory, traffic, supply chains, the list is endless). DATA MOATS, AI CANNIBALISM

Leaked passwords exceeded 721M in 2022

We’ve already reached peak passwords. The biggest challenge though is that over 70% of users are still using the already-compromised passwords. The new ‘Passkeys’ standard will help. But for the long tail of smaller companies, websites, personal businesses, charities, schools… passwords are going to be here for a while yet. And therefore so will hacking and account takeover. We need a new way to prove who we are… and new customer tools that are for everyone, everywhere. LEAKS, PASSKEYS

RESOURCES

Here are some more Interesting Things, interwoven with the future of digital customer relationships:

• The FTC is now warning the public about thieves using voice clones READ

• Wallet wars? It’s the war of ecosystems! READ

• Future of Human Agency READ

• Amy Webb’s excellent tech trends at SXSW WATCH

• UK Government White Paper on AI regulation READ

• How to build a new business with GPT4 and $100 READ

• Stop Wasting Your Customers’ Time READ

• A very (UK) government mess of online digital identity READ

• That didn’t take long: Bing considering how ads will work in AI READ

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