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MATTR CPO Luke McIntyre sits down with one of the world’s foremost experts in digital identity and digital money, David G.W. Birch — a renowned author, advisor and commentator on digital financial and verification services.
His work and insights have appeared in a multitude of publications, including Forbes, Financial World, Wired, and The Guardian.
Somehow, David also finds the time to write books. His latest, Money in the Metaverse: Digital assets, online identities, spatial computing and why virtual worlds mean real business (coauthored with Victoria Richardson) explores the potential for financial services in metaverses and the ‘always-on’ immersive future internet.
I recently had the pleasure of sitting down with David to hear his thoughts on TrustTech. Without spoiling too much, I’ll note one important and recurring theme: in David’s view, the technology is ready — so TrustTech is poised to transform lives around the world.
What does TrustTech mean to you — today and into the future?
Imagine a future in which being digitally scammed is a thing of the past, where you can prove your age without sharing your birth date, and where you can perform a multitude of tasks — updating a driver’s license, opening a bank account, registering for a service — remotely, in real time, at any time of day.
“TrustTech” — the shorthand for Trust Technology — is the umbrella term for platforms, products, features, and other capabilities that enable these sorts of high-assurance relationships, transactions, and experiences.
What does TrustTech mean to David, and how does he see it shaping our future?
In his response, David draws a parallel to FinTech and the pressure it exerted on traditional financial institutions to innovate and deliver new and improved experiences.
He envisions TrustTech fulfilling a similar role, commenting that, “My bank app … is way better than it used to be, because of the pressure from the FinTechs. I'm looking towards TrustTech to do the same kind of thing.”
In other words, building trust into the very fabric of our technology infrastructure will not only will help to guard against threats, but it will enable and encourage innovation founded upon trust. Is TrustTech about security or convenience?
For decades, digital services have faced a trade-off: the more secure, the less convenient — and vice versa. Generally speaking, longer passwords are tougher to guess or crack, but harder to remember and to enter correctly. Multi-factor authentication (MFA) introduces more than one authentication factor, but adds additional steps and might require additional hardware.
Unlike legacy approaches that try to instill trust in an inherently trustless system, TrustTech builds it into the fabric of our infrastructure and systems.
What does this mean for participants within the ecosystem?
Well, it depends upon your point of view.
David’s observation is that, “For consumers, those aren't security technologies — they're convenience technologies.”
For those looking to advance TrustTech, David sees this distinction is vitally important, because “We see these things in a security context, but actually, those technologies deliver convenience to consumers — and that that's how we get these things moving forward.”
So, while TrustTech represents a paradigm shift to a world in which transactions can be both convenient and secure, it’s convenience that will win over the hearts and minds of users.
How can we help regulators keep pace with what’s becoming possible?
Technology is, of course, a foundational enabler of trust infrastructure, but it doesn’t exist in a vacuum.
For instance, technology without use cases or valuable outcomes may be intellectually interesting — yet would ultimately be irrelevant.
More importantly, regulatory bodies have the potential to shape TrustTech’s role in real life as much as the technology itself does.
In David’s view, TrustTech as it exists today — let alone what’s still to come — is already leaps and bounds beyond what users and regulators have become accustomed to (“The technology we have now can deliver the regulators … a much better solution than they have now.”)
However, David is quick to point a challenge of communication. Those with an interest in physics have long grappled with the challenge that analogies from the classical models (e.g., billiard balls and mini solar systems) simply don’t help when trying to explain quantum mechanics and relativity. In fact, trying to extend classical examples into the quantum and relativistic realms can actually make things more confusing!
TrustTech suffers from the same problem: it’s so different from what we’ve become accustomed to that it can be hard to describe.
As David explains, “If you've grown up in a world of index cards and driving licences, the idea that I could show you my driving licence but not disclose any personal information sounds odd.” He adds that, “These things are cryptographically trivial to do, but actually they're not in people's everyday imagination of how things work. If you think of identity as sort of an index card in a filing cabinet, selective disclosure just sounds unbelievable.”
David’s ultimate takeaway? It’s on all of us within the TrustTech community to find better ways to communicate with the regulators.
Are industries ready for digital trust services?
Innovations often suffer from a chicken and egg problem: interdependent pieces need to advance in parallel, otherwise only a fraction of the potential will be reached. Despite progress on mobile driver’s licenses (mDL) and ID frameworks, might digital trust services face a similar issue?
In David’s view, the technology is ready, but there’s work to be done on governance and frameworks, with governments and industry ecosystems having important roles to play. “I tend to be very focused on banking and finance,” he explains, “But you could easily imagine the travel industry could have [a framework], or the gaming industry, the leisure industry, the media, and so on.”
Have we reached the tipping point for digital identities and TrustTech?
When is the right time for a company — or an entire industry — to double-down on an innovation (or, in the case of TrustTech, an entire paradigm shift)?
Time it right, and you gain a first-mover advantage that can result in a large slice of a rapidly growing pie. Alternatively, moving too early risks the opportunity cost associated with wasted resources; moving too late means playing catch-up.
Focusing on the financial sector, David points to three developments that, in his view, are driving banks to embrace digital identities and high assurance:
- The wallet wars: “It's not about being top of wallet — It's about being the wallet.”
- The extent of fraud: “We're at a breaking point where something has to happen … and digital identity is obviously the way forward.”
- Technological readiness: “The capabilities of the technology, the standards, the interoperability — that's all changed.”
What role do you see for the banking sector within the TrustTech fabric?
David’s expertise is far-reaching, but he’s particularly well known for his insights on the intersection of digital services and the financial industry.
Naturally, we wanted to hear what he had to say about the potential for banks to not only build services on top of the TrustTech fabric, but to be an important part of the fabric itself.
“They already know who you are, they've already got all of your personal data, but it's just a cost — because the costs of compliance are so vast,” David noted, before adding that “And I think digital identity gives them an opportunity to begin thinking about different ways of monetizing.”
He goes on to share some examples of how banks can be the source of trusted (i.e., verified) identity credentials that help to enable a wider TrustTech ecosystem.
To learn more about what David has to say, please be sure to visit his website.
Watch the full video here.
