Open Banking hits the US - now what about digital ID? And Agent AI is inevitable - but will we do it right?
Open Banking hits the US - now what about digital ID? And Agent AI is inevitable - but will we do it right?
Plus: Digital identity wallets to reach 1.5Bn by 2029, KYE = Know Your Employees, and when Personal AI becomes wearable
Hi everyone, thanks for coming back to Customer Futures. Each week I unpack the ever-increasing and disruptive shifts around digital wallets, Personal AI and digital customer relationships.
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📖 STORIES THIS WEEK
Our biggest issue with data innovation is staring us in the face.
But most people can’t see it. And yet it’s so simple.
Innovation is about forgiveness not permission. Yet handling personal data requires permission not forgiveness.
You can see it in almost every headline about tech innovation, ethics, privacy and data security.
Question for you: should we just let the ‘brilliant minds’ get on with things to create a better world using our personal information freely? Or should we take less risk, lock down the personal data, and proceed cautiously?
It’s one of the most important issues of our time. And it’s going to drive a stake through the heart of the AI revolution if we’re not careful.
The answer? Also simple.
Start on the customer side.
Start with people and their data. Start with privacy by design and default.
Start with facts about people, not the data itself.
Start with digital wallets, verifiable credentials and zero-knowledge proofs.
Yes, we need innovation. But we also need data protection. The answer is to start with the individual, not the tech.
Today digital transformation is only 50% done.
And it can only ever be 50% done while we start and end on the business side.
But when we include the customer as an active participant, not just a passive subject, amazing things become possible.
Digital things.
Transformative things.
We can unleash a new wave of data-driven innovation that will do things with and for people, rather than do things to them.
We will finally have the permission we need - with the right data at the right time - to innovate with All The Data Things.
It’s simple. And it can start now.
Welcome to the future of being a digital customer. And welcome back to the Customer Futures newsletter.
The market continues to swirl around digital wallets, personal AI and digital ID. And there’s a LOT to unpack.
So it’s a pretty chunky edition this week:
Open Banking hits the US - now what about digital ID?
There’s a wallet service for that…
Agent AI is inevitable - but will we do it right?
Slowing down T&Cs
Will Personal AI be wearable?
The UK ICO issues a notice against Snap’s GenAI chatbot
The next wave: [Fill in the blank] Pass
KYE: Know Your Employees
… plus other links about the future of digital customers you don’t want to miss
So grab a coffee (or herbal tea of choice), a comfy chair, and Let’s Go.
Open Banking hits the US - now what about digital ID?
The US Government has just announced their proposed Open Banking Rule. And it’s a big deal.
I strongly recommend reading Simon Taylor’s breakdown on what it is, what it means and some lessons from the UK.
The big things to know:
Data providers - the banks, card providers etc. - will be required to
Offer access to 12 months of transactions (wow)
Disclose all fees and rewards (amazing)
Include all account verification data e.g. name, email and address (though not date of birth) (important)
Provide all this via API (of course)
… make all this free (now this gets interesting)
And 3rd parties accessing the customer data will be required to
Make it clear to users how their data is used, including privacy (finally)
Standardise access and security (expected)
Exclude any use for targetted advertising, data re-sale, or cross-selling (ok this is excellent)
Holy wow this is going to shake things up.
And remember, it’s all happening against the backdrop of a fired-up conversation in the USA right now about digital ID.
Including a frothy debate about new digital identity wallets and reusable digital identity credentials. More on that from Customer Futures soon.
Now, it’s only the proposed rules, now open for comment. But Open Banking USA could be expected to land before the US election a year from now.
Here are my immediate questions:
What happens if digital identity wallets can be used for open banking identity verification? Does that change the data flows between data providers and 3rd parties?
What happens when 3rd parties turn our banking data into verifiable credentials for use elsewhere? Where might that data be used? When the 3rd party - not the bank - becomes the ‘issuer of record’, who will trust the data?
Does that mean new governance models are needed within Financial Services? To cover digital wallets showing up within the Open Banking system?
And what happens when KYC becomes portable as a set of verifiable credentials? Will this finally give way to the ideas around “perpetual KYC”? (yes I know that KYC is dynamic data… and it’s always down to how each bank implements the regs… but more on that another time)
Well now.
Open Banking + Digital Identity Wallets just got super interesting. And that’s before you whisper “Personal AI”.
Hold on to your hats people. Personal finance, payments and banking-as-a-service just went to the moon.
Because open banking is really about personal data. And remember: personal data isn’t oil. It never was. Personal data is actually a blood supply.
With blood that’s beating from the customer’s heart.
Not the bank’s.
There’s a wallet service for that…
When it comes to digital wallets, there are at least two elephants in the room.
Google and Apple.
Or more specifically, their market-dominating payment+loyalty+identity apps that billions of people use every day.
As you can imagine, I have a lot of conversations about the future of digital wallets.
Here’s what I get asked about most:
“OK, so I get that digital identity wallets will be brilliant. But how will new wallet providers ever compete with the GAFA? Surely it’s all about distribution?”
“Won’t Apple and Google try to kill/ lock out/ simply copy all the other digital wallets? And won’t they just win because they have the best experience and relationships with brands?”
Both are great and important points. And the answer, as always, is ‘it depends’.
Why? Because any rollout of digital wallets fast becomes about (in no particular order):
Use case
Value
Geography
Tech standards
Tech politics
Actual politics
User experience
Consumer demand
Regulations
It’s why so many are stewing over the prospect of new ‘citizen wallets’ provided by governments.
A default wallet option for individuals. And part of a new Public Digital Infrastructure.
In fact, it’s one of the founding reasons the eIDAS digital wallet is being pushed so hard by the EU. To provide a rear-guard action against the ‘the GAFA’ dominating personal data in Europe.
And to avoid any further lock-up of the identity market by consumer-focussed wallet providers.
The other EU defence against the GAFA is the Digital Markets Act (DMA). This aims to ‘open up’ the large platform providers - so-called ‘Digital Gatekeepers’ - which in large part covers Google, Apple, Facebook and Amazon.
But back to the GAFA and wallets and competition.
Bryn Robinson-Morgan has worked in the identity market for some time. He’s been around the block when it comes to new identity models. And how things might fit together. Especially how old and new ID tech might come together.
He’s just written up some interesting ideas about how the GAFA could fit in to all this.
If architected properly, he argues, we should be able to leave the ‘native wallets’ - those running the hardware and operating systems (e.g. the GAFA) - to get on with what they are good at.
And then to enable other ‘wallet services’ to build experiences on top.
“What if rather than trying to compete with the native wallets there’s a way of working with them? Leave the putting stuff in, storing stuff and presenting stuff to them. Let them secure it, manage the integration with my calendar and geo-location.
“Let them figure out how to use my wallet across devices, how to handle online and offline interactions, how to store frequently used stuff on device and infrequently used stuff in the cloud. How to connect to a Relying Party without a Nascar screen of a hundred wallet providers for the user to select from.
“With the wallet plumbing sorted, imagine the innovation that can be built on top. Rather than an App Store, you can now have a Wallet Services Store that provides value-add to users, issuers of credentials and relying parties.
“Need to get your mobile driving licence? There’s a wallet service for that. Need to meet NIST IAL2 to get access to your health data? There’s a wallet service for that too. Need an AI Agent to manage my life… we’ll you get the idea.
I like this idea. Not just because it starts a conversation about how to answer my two big questions above about the GAFA and market dynamics.
But also because it begins to point to new commercial models for wallets.
I’ve long argued that most digital wallets will soon offer ‘plug-ins’ or ‘extensions’. Just like browsers do today. (More coming on that in future posts).
For now though, let’s chew on this idea of added ‘wallet services’.
Here’s my perspective:
The EU, and specifically the DMA, is going to have an outsized impact on native wallets over the next few years
Any digital wallet provided in the EU by the GAFA will very likely be in-scope of the DMA - specifically as a ‘Digital Gatekeeper’ to 3rd parties
As a result, ‘native’ digital wallets will have to be opened up via API
This will lead to new 3rd party extensions that sit atop their digital wallets - much as Bryn describes
In the EU at least, I predict digital wallets will become a new kind of customer-centric, open and private digital platform.
So now let’s revisit those most-asked questions above. Won’t the GAFA win by default?
Frustratingly, my answer will still be ‘it depends’.
Because the digital wallet market - especially as the DMA kicks in across the EU - will continue to be dictated by use case… geography… tech standards… tech politics… actual politics… user experience… consumer demand… and of course regulations.
As they say, “the best export from the EU is regulation…”
BRYN ON WALLET SERVICES, WHY THE DMA IS A BIG DEAL
Agent AI is inevitable - but will we do it right?
Where is AI going next? Most experts agree we’re in the middle of an AI transition.
The last few decades of work on AI, which came to a head around 2015-16, was about classification.
What is this object? Is this a cat or a car? How can we make sense of natural language?
And the last few years have turned those classification models into prediction engines. Computers learning to come up with new things. This is the stage we are in now. Generative AI.
GenAI is about asking: what’s the next logical sentence/ pixel/ image/ sound? What’s the pattern to follow?
The next wave, predicted to explode over the next 12-24 months, is about autonomous agents doing things on their own.
Working to meet their own goals. To get things done independently. It’s heralded as the next wave of artificial intelligence. It’s Agent AI.
“Hey AI, go do something (digital) for me.”
Set up a new company. Order pizza. Build an app. And if you need to, spawn 50 other AI Agents to help you with specific tasks to run in parallel.
Let’s look at Agent AI with a Customer Futures hat on. I have a bunch of questions:
How will we know our AI Agents have done the thing they were asked? Surely they could fake some of it? How will we know? How will we verify the outcomes?
How will companies interacting with an Agent AI know they are dealing with an AI? Will that matter?
And here’s a zinger: Today we are fighting AI bots. What happens when the bots are legitimate customers using Agent AIs to interact with the business? Just think about it: almost all businesses today are attempting to use cutting-edge digital ID tools to screen out the bots. Soon, this very approach will accidentally miss the real customers asking for real things. Will this miss real revenues?
Will smart agents be given legitimate access to digital products and services to act on their behalf? If so, how will this work?
And there are many more questions besides.
Because once AI agents show up at the doors of business, it’s going to be chaos. Who is who? What is what? What is authentic?
Helpfully, MIT just held a symposium on exactly this. With a bunch of high-profile speakers talking about the future, including what’s next for Agent AI.
Worth listening to this video snippet of Sam Altman (Founder of ChatGPT and OpenAI) and Daniela Rus (CSAIL Director) on it all.
Agent AI is now inevitable. The question is: will we do it right?
Slowing down T&Cs
Privacy expert Merry Marwig wins the Idea of the Week award.
“Imagine if companies were required to estimate how long it would take an average reader to read the terms of service and privacy notice…say like 25 hours…
“…and that a service contract could not be signed until the mandated “informed consent” time has elapsed… …where the customer could make the choice to proceed or not. Basically, not allowing people to scroll through the TOS in 2 min and then click the check box.
“Slowed sales velocity? Me thinks, by a lot. Especially because the instant gratification time would be impossible and high-pressure sales tactics wouldn’t work.
Brilliant.
Will Personal AI be wearable?
Earlier this year there was a whole tech news cycle about ex-Apple designers launching ‘Humane’. A wearable, screenless Personal AI.
The Humane team has now announced their first product, ‘Pin’.
Revealed at the Paris Fashion Show, they enlisted Naomi Campbell to take Pin for a public spin.
This is just the start of new forms of Personal AI. New interaction modes and models.
There’s clearly plenty of digital UI innovation to come, especially for personal digital tools that are not just helpful, but private and intimate.
Yes, Meta recently announced their new connected Rayban Glasses (no comment). But for me, much more interestingly was the quiet announcement from Avi Schiffman about his latest project ‘Tab’.
“Tab is the world’s most personal wearable AI. You can talk to Tab about anything in your life. Our computers are now our creative partners!”
Schiffman became famous during COVID-19 when he and some other Harvard freshmen built a real-time pandemic tracker that attracted 600m users. Apparently it only cost $1000 to make.
Of course, he’s since dropped out of Harvard (which has its own hall of fame). He’s now on a mission to fix global aid, and to reinvent emergency response during crises.
Anyway, Tab looks very powerful, and is taking on the same problem space as Humane:
Where Personal AI meets Spacial Computing.
My take: Compute speeds are only accelerating. Devices are only getting smaller. And connections are only getting faster.
So it’s inevitable that much of our personal data will soon live, and be largely processed, on-device.
This also means that advanced AI can live where it needs to live. Using ‘zero knowledge’ techniques like holomorphic encryption to keep things private.
Pretty much the opposite of Amazon’s Alexa.
I’m super interested to see where this goes, and the impact on AI user interfaces.
The UK ICO issues a notice against Snap’s GenAI chatbot
Predictable. The UK’s Information Commissioner confirms that Snap failed to “adequately identify and assess the privacy risks to children and other users before launching ‘My AI’”.
Last week’s Customer Futures newsletter pointed to some important GDPR guidance for building AI products. It looks like Snap wasn’t paying attention.
From Phil Lee:
“Expect this to be the tip of a very large iceberg of future DPA enforcement against companies for rapid roll-out of generative AI technologies without sufficient attention paid to compliance.
“All too often, corporate emphasis is placed on being first-to-market / keeping pace with competitors, and not managing the data protection risks to data subjects.
“That's unlikely to change in the short term while the AI gold-rush is in full swing, but we are already starting to see the early stages of regulatory fightback.”
ICO RULING, GDPR + AI, PHIL LEE
The next wave: [Fill in the blank] Pass
Regular readers of Customer Futures will already know what’s coming. A tsunami of digital identity wallets is about to hit the market.
More wallets in the market mean more people interacting with organisations digitally.
And more digital interactions with businesses and each other means an explosion of different digital credentials coming to market. Useful for all sorts of things, in all sorts of places.
I predict we’ll soon see a Very Long Tail of wallets. But as you should know by now: no one cares about wallets. And no one cares about data.
They care about the value.
And what you can DO with wallets and agents.
The result? Expect a new wave of new apps called “____Pass”.
A rainbow of new digital apps that give you access to places - both physical and digital. They get you in, and help you prove things about yourself to unlock new experiences.
This week’s edition: ScoutPass. The first-ever digital wallet for Scouts. Powered by Learning Economy Studios.
“This app will allow you to store your Scouting credentials, like digital badges, boosts and memberships. During JOTA-JOTI you can redeem your Challenge Valley accomplishments for official digital badges in ScoutPass.”
“Plus, you can choose from 40+ fun boost badges to give your friends! Check it out for camp boosts like “Mosquito Magnet,” “Bear Grylls’ Protégé,” or “Charcoal Chef” and others like “Master of Fun,” “Resilience Rockstar” and “Supportive Squad.”
Yes, we’re in the foothills of the digital wallet and portable credentials market. But what better example for portable personal information?
Hey! You don’t need to know WHO I am. But I can now easily prove what I have done before, and how I can help you.
What used to be fabric badges sewn onto jumpers is now digital, portable and private. New verifiable credentials issued to a Scout’s own digital wallet.
How exciting. And the lesson?
Be Prepared for the coming Long Tail of new digital wallets.
And of course, Passes.
KYE: Know Your Employees
This very nearly made the ‘Other Things’ list. It’s Dave Birch’s latest post on why Employee ID is a big deal. And how ‘KYE’ is about to be transformed with digital wallets and verifiable credentials (of course).
But I wanted to point out a few things.
First, as individuals we are multi-dimensional. We are customers, patients, employees, consumers, users, responsible officers, siblings, volunteers, mentors, holders of power of attorney, beneficiaries, owners and students. And much more.
So when we think about distribution and go-to-market for digital wallets, we must remember to look right across the human experience. Not just at government or commercial use cases like payments, onboarding and authentication.
But to our whole selves. Digital and non-digital.
Dave’s post reminds us that employee ID makes for a pretty compelling market entry point.
Second, you can see how some groups could become ‘digital wallet by default’.
For example, offering smoother HR processes for those who can. With face-to-face or part-digital alternatives for those who can’t, or won’t use a digital option.
And third, that Dave Birch - one of the leading voices on digital identity, payments and digital public infrastructure (including CDBCs) - is now championing (custodial) wallets and verifiable credentials.
The wallet opportunity is starting to heat up. And Dave now gets it.
Also worth pointing to Dave’s other recent post in Forbes about Very Smart Wallets. Where he points to my work on digital wallets as a new customer channel.
(For those that don’t already follow Dave, I highly recommend his excellent blog “In the Future, Everyone Will Be Famous for 15Mb”).
KYE, 15MB BLOG, VERY SMART WALLETS
📌 OTHER THINGS
There are far too many interesting and important Customer Futures things to include in this edition. So here are some more links to chew on:
Digital identity wallets to reach 1.5B by 2029 READ
UK Online Safety Bill is now ready to become law (with new rules around digital ID and age checks) READ
EU Data Protection Supervisor's Opinion on the EU AI Act READ
Flaws in the European Commission’s plan to fix GDPR procedures READ
The 23andMe data breach reveals the vulnerabilities of our interconnected data READ
Organizations are fighting for the ethical adoption of AI. Here's how you can help READ
The Next Step in Digital Identity: Reusable, Privacy-First and User-Owned LISTEN
And that’s a wrap. Stay tuned for more Customer Futures soon, both here and over at LinkedIn.
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