- Thierry Spanjaard
Transparency and control build trust
Talking about ethics in a payment dedicated conference may sound like a challenge! A conference like Money20/20 Europe is filled up with company presentations and conferences at all levels of technicity covering all aspects of payment transactions. Sometimes, some topics are radically different and bring a fresh breeze to the audience. As we all know payment is built on trust, as we only accept a payment because we trust a payment means. Dan Ariely, Professor of Psychology and Behavioral Economics at Duke University, demonstrated to the audience that trust can be easily built among small groups of individuals thanks to a combination of long term relationship, reputation and transparency.
In business, and especially online business, which are deprived of human interactions, trust is a lot more difficult to establish. Large organizations such as Airbnb, Uber, and a few others have been able to establish trust over time, building on those same three factors. In a business environment, each player, each merchant, and every one of us is conscious about our reputation we patiently build and make evolve along our working life.
If trust is needed on the merchant side, it is also paramount on the customer side!
Risk assessment is an essential step of payment transactions. Credit rating has been existing for decades, but the availability of large amounts of data is changing the situation. Traditionally financial institutions were using their own data, accumulated through longstanding consumer relations to establish a rating and decide to accept or not a transaction.
Now, fraud detection professionals are relying on their expertise in data mining to analyze customer related data and deliver to merchants and financial institutions all they need to decide in real time whether they should accept or not a transaction.
Verifying a digital identity and making a decision whether to accept or not a payment uses fraud preventions techniques based on a wide variety of parameters. Companies now rely on machine learning and artificial intelligence to explore consumer related data not only from previous transactions but also coming from a variety of sources including social networks, utilities, online behavior, etc.
Long term relationship and reputation are at the core of building trust. Transparency is harder to achieve, especially in the online world. Mary Aiken, cyberpsychologist, another speaker at Money20/20, who puts metrics behind our online behavior. According to her, the internet is not simply an infrastructure. It can have an impact on human behavior, especially on its darker sides: trolling, cyberfraud, cybercrime, bullying, etc. Mary Aiken demonstrates life in society has suppressed many human negative behaviors while life online gives the illusion of anonymity and reveals the darkest corners of human personalities. This is triggered by the feeling nobody is in charge of policing this environment. When users feel anonymous and are under the impression of being left without control, there is no incentive to transparency.
The feeling of anonymity and lack of control is actually contradicted by the efficiency of big data based risk assessment methods: no one is anonymous online anymore.
Bringing back trust means combining the factors evidenced by Dan Ariely, long term relationship, reputation and transparency with the needs demonstrated by Mary Aiken: a demand for self-responsibility in the connected world.