Albert Einstein once said “we cannot solve our problems with the same level of thinking that created them.” Nowhere is this more true than in the digital world that forever moves at the speed of light. Rapid advances in technology have given us the ability to spend, borrow, and invest money at a touch of a button. FinTech innovation has grabbed our attention with a multitude of seamless tools to better manage our finances. 

The tailwinds of digital banking transformation further accelerated by the irrevocable forces of the COVID-19 pandemic have reshaped how we interact with financial services. These have, on one hand, enabled new hyper-personalised experiences across web, mobile, and offline channels. But in so doing, have also amplified universal digital vulnerabilities and widened the digital divide. Addressing this challenge with “new level of thinking,” as Einstein would say, is now more important than ever.   

Moving at the (Variable) Speed of Light

There’s no doubt that digital adoption is on the rise across financial services. Research from the Lloyds Bank 2022 Consumer Digital Index shows that 99 percent of the U.K. population have moved “online” – up from 89 percent six years prior. Monthly announcements from the Open Banking Implementation Entity (OBIE) show seven million of us making use of Open Banking services to make payments and gain enhanced visibility of our finances. 

However, as with any rapid change, there’s always a flipside. The same research from Lloyds Bank shows that as many as 27 percent of the U.K. population have “low digital capability.” And that’s not all. A further 35 percent are struggling to get online as a direct result of the cost-of-living crisis. But the reality is that digital vulnerability is even more prevalent than these insights indicate.     

As consumers of digital financial services we are all, to a varying degree, either temporarily or permanently at risk of becoming digitally vulnerable. A young person becomes inherently vulnerable when being asked to complete arduous know-your-customer (KYC) checks while attempting to open up a junior account. An adult becomes situationally vulnerable when seeking to complete step-up authentication (SCA) while unable to find their smartphone. A senior citizen becomes inherently, situationally, and (potentially) pathogenetically vulnerable when attempting to transfer money via their web banking portal despite being unable to do so because of their audio-visual ailments. 

Universal Digital Vulnerability

The concept of digital vulnerability is as grand and elusive as they come. That’s because we tend to associate vulnerability with a particular set of characteristics that make us less “well off” compared to others at any particular point in time. This conceptual approach invariably encourages us to jump to developing point solutions that seek to address these challenges. Nowhere is this more prevalent than across digital financial services, where accessibility controls are seen as a panacea for all digital vulnerability challenges.

There can be no doubt that enhancing and broadening accessibility features across digital financial journeys is tremendously important for helping people simply and safely connect with the digital world. But herein lies the challenge: this does not go far enough. And that’s because digital vulnerability is universal and affects us all in different ways, and at different times. Leveraging the seminal works of Lahad and Cohen on “Vulnerability Circles” gives us a useful conceptual model for defining three domains of universal digital vulnerability:

• Inherent vulnerabilities: driven by temporary or permanent individual characteristics, such as age, gender, health, disabilities 

• Situational vulnerabilities: driven by contextual factors, such as social, economic, personal, and environmental conditions affecting the individual 

• Pathogenic vulnerabilities: driven by interpersonal factors, such as social norms, prejudice, and exclusion

Tackling the Problem At the Root

But there is a way forward. By embracing the notion of universal digital vulnerability, financial service providers and software vendors can tackle the problem at the root by taking advantage of modern digital identity. At a fundamental level, identity and access management (IAM) gives digital providers the ability to understand our contextual needs, vulnerabilities, and circumstances, and use these insights to deliver enhanced digital access experiences that are:

• Adaptive: using the right channel at the right time to deliver value to the customer when they may be unable to access digital services 

• Connected: using trusted third parties and persons to carry out tasks through delegated authority when a customer is unable to do so themselves

• Proactive: infusing inclusion by design into the digital development cycle to give a customer choice of how they access digital services   

• Balanced: ensuring that the right amount of friction is introduced at the right time and through the appropriate channel to protect customers from malicious actors while not preventing them from accessing digital services altogether         

People Sense, Social Sense, Business Sense

Adopting a new level of thinking to address universal digital vulnerability across financial services is more important than ever as the pace of digitisation continues to rise. Helping people simply and safely access financial services is not only good for us as consumers, good for further advancing inclusive finance globally, but also makes business sense. Helping young people, adults, and senior citizens overcome their digital vulnerabilities, serves to build brand loyalty, retention, and average product holding. Modern digital identity is a critical building block to making sure no one gets left behind.