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Digital Identity – Why It Matters and Why It’s Important We Get It Right

MD Staff

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Leaders from government, business, international organizations, civil society and the humanitarian community have called for greater multistakeholder cooperation on digital identity. The UNHCR, World Bank, World Food Programme, Consumers International, Omidyar Network, the Linux Foundation, FIDO Alliance, GSMA, Hyperledger, ID2020, Open Identity Exchange, Sovrin Foundation, World Identity Network, Accenture, Barclays, Deutsche Bank, Mastercard, Microsoft, Sedicii and Visa announced their commitment to strengthen collective action on this agenda. In an open call, they also encouraged other organizations to join in an initial multistakeholder gathering in spring 2018.

According to World Bank estimates, about 1.1 billion people lack formal identification. Digital identity and access systems can unlock a range of basic and empowering services for individuals, including financial inclusion, healthcare and education. Equally, they hold significant promise for helping refugees and displaced populations to access immediate and longer-term services.

Achieving progress will require significant shared challenges to be overcome. In addition to coordination challenges such as interoperability, individuals and communities have voiced concerns about flaws and vulnerabilities in existing systems that need to be addressed.

“Digital identities and access systems are foundational elements of our shared digital future. They offer tremendous opportunities for individuals and society, especially for those without formal ID. Additionally, we need to ensure that new approaches are being laid in a sustainable, inclusive and trustworthy manner. Governments, international organizations, civil society and business will all play a critical role in creating this future,” said Derek O’Halloran, Head, World Economic Forum System Initiative on Shaping the Future of Digital Economy and Society.

“We estimate it will take $12 billion to achieve identification for all. The World Bank will secure over $750 million investments in ID-related projects in the next three years and we will strive to mobilize more financing from other sources,” said Kristalina Georgieva, Chief Executive Officer, World Bank and co-chair of the Identification for Development (ID4D) High-Level Advisory Council with Amina J. Mohammed, United Nations Deputy Secretary-General. “If we are to reach more than a billion people without proof of identity, we need everyone to work together, including countries, development partners, UN agencies, the private sector and civil society.”

Multistakeholder dialogue is needed on how to pursue the opportunities that come with digital identities and ensure protection of rights in a sustainable and responsible manner. It is critical to deliberate on who should create, control and benefit from people’s identity information. To empower individuals, identity systems need to enhance security and convenience, preserve privacy and uphold individual rights and freedoms. Adoption of shared principles, standards and practices, alongside innovations in technologies and implementation frameworks, will be important to support these goals.

“Individuals have the most to lose if things go wrong with digital ID – so they need control over how their identity is used and by whom, along with gold standard data security and solid assurances that it won’t affect access, for example, to healthcare, welfare support or education, or key democratic rights to vote or speak out. Without these guarantees, ID schemes will face opposition and fail to fulfil their potential, said Amanda Long, Director-General, Consumers International.

“We believe that technologies like blockchain can play a powerful role in creating a secure, portable, personal solution for those living without identity, but technology alone isn’t enough,” said Peggy Johnson, Executive Vice-President of Business Development, Microsoft. “A challenge of this magnitude requires commitments and collaboration across sectors to develop the shared standards and principles required to deliver lasting impact.”

With the use of digital technologies across the world at an all-time high, and with the adoption of the internet of things expected to connect over 200 billion devices to the internet by 2020, the scope of identity management is also fast expanding to devices and legal entities.

Digital identity is relevant in a wide range of situations that require people and entities to prove who they are; there is no universal, “one-size-fits-all” approach. This is reflected in the diversity of approaches adopted in various ID and access systems implemented to date. Ongoing dialogue and coordinated action between stakeholders from across sectors, industries and regions will foster shared understanding of challenges and solutions, and accelerate global progress.

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How Strategy, Technology, and Operations Come Together in “The Symphonic Enterprise”

MD Staff

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New Report shares how leading companies are looking beyond traditional domains to leverage technology broadly across the enterprise.

Deloitte’s Tech Trends 2018 spotlights eight key trends that could potentially impact business strategies and outcomes. This year’s theme, “The symphonic enterprise,” is an idea that describes strategy, technology, and operations working together, in harmony, across domains and boundaries.

Among the trends featured in this year’s report are:

  • Digital reality: represents the next phase in the augmented reality and virtual reality revolution;
  • No-collar workforce: discusses HR strategies for managing environments in which humans and machines work together as equals; and
  • The new core: examines how core systems and the information they contain are driving digital convergence and breaking down traditional operational boundaries.

Tech Trends 2018 features the “Exponential technology watch list” which discusses strategies for exploring and harnessing innovation ideas that may not manifest for five years or more. It also explores two longer-term technology trends: artificial general intelligence and quantum encryption.

“Technology trends are no longer just the CIO’s or CTO’s responsibility. It’s become a CxO, CEO and even board-level conversation,” said Bill Briggs, chief technology officer and principal, Deloitte Consulting LLP. “We now see many forward-thinking organizations approach disruptive change more strategically. Instead of launching separate, domain-specific initiatives, they are thinking about exploration, use cases and deployment more holistically. Increasingly, they are focusing on how multiple disruptive technologies can work together to drive meaningful and measurable impact across the enterprise.”

Here is a closer look at some of the trends that could offer opportunities and challenges across industries during the next 18 to 24 months:

No-collar workforce: The rise of automation, artificial intelligence and cognitive technologies will impact jobs and job families. The organization of the future must rewire talent management for the new hybrid human-machine workforce—simultaneously retraining augmented workers and pioneering new HR processes for managing virtual workers.

Blockchain to blockchains: Blockchain is moving rapidly from exploration into mission-critical production scenarios. Advanced use cases and increased adoption drives the need to coordinate, integrate and orchestrate multiple blockchains across a value chain.

Digital reality: In the next phase of augmented reality and virtual reality’s evolution, companies are focusing less on the novelty of cool devices, and are focusing instead on developing strategies and innovative use cases. As this trend unfolds, IT leaders will work to tackle persistent challenges in core integration, cloud deployment, connectivity and access.

“The old lines are blurring,” Briggs continued. “Instead of thinking within industry and business line verticals, and business process or technology platform horizontals, we’re entering a world of diagonals – transcending technical scope and traditional organizational boundaries. These technology trends are enabling an entirely new way of solving problems and uncovering business opportunities. The symphonic enterprise is unified; it’s the controlled collision of trends, with strategy, technology and operations working in harmony to imagine tomorrow, and get there from the realities of today.”

The report features case studies, perspectives from industry luminaries, and insights from Deloitte practitioners. As in prior years, it provides an 18-24 month outlook on technology trends.

The full Tech Trends 2018 report can be found here.

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Digital Controllership: Finance and Accounting Robotic Process Automation a Priority

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In a recent Deloitte Center for Controllership™ poll of more than 1,700 finance, accounting and other professionals, 52.8 percent say their organizations plan digital controllership improvements—leveraging process automation, analytics and other technologies for financial and accounting processes—in the year ahead. Using finance and accounting robotic process automation (RPA) to increase efficiency and internal controls is the top priority for such efforts (34.7 percent).

“Finance and accounting process automation can really run the gamut. Simpler, enhanced finance automation can address common, industry agnostic accounting issues. RPA can build momentum by performing repetitive, manual financial and accounting processes. And, cognitive computing can be configured to adapt to non-routine, industry and organizationally specific needs,” said Kyle Cheney, Deloitte Risk and Financial Advisory partner, Deloitte & Touche LLP. “No matter the level of process automation complexity, it’s easy to see how efficiency and controls can be improved by well-executed programs.”

Poll respondents report that the biggest benefits of implementing a digital controllership strategy include: Improved talent resource allocation toward higher value, strategic work by reducing manual, repetitive work (40.5 percent); improved internal controls by testing wider sets of data and reducing human error (23.5 percent); and, improved visibility into future risks and opportunities by testing wider data sets and enabling talent to analyze trends and anomalies (16.9 percent).

“Because bots can work 24/7/365, well-honed RPA programs can help organizations improve the quality of their governance, risk mediation, predictive insights, working capital management and financial reporting,” said Dave Stahler, Deloitte Risk and Financial Advisory partner, Deloitte & Touche LLP. “However, digital controllership efforts leveraging process automation really need to start with a good foundation in risk management to keep errors and inefficiencies to a minimum.”

Teams starting or expanding finance and accounting robotic process automation programs typically work to manage common risks in areas including:

  • Technology – Improper bot design may impact existing IT infrastructure. Conversely, routine IT platform changes may impact automation solutions.
  • Regulatory compliance – Automation errors can reduce accuracy of regulatory reports, risking fines and sanctions as well as legal violations.
  • Operations – Increased processing errors can be caused by badly designed automation solutions. Lack of effective oversight procedures can lead to increased operational inefficiencies.
  • Talent – In times of organizational transformation, morale may suffer if communications to employees don’t focus on the higher level work they’ll be able to perform with RPA results. Further, access to and oversight of automated processes must be carefully managed to prevent and detect abuse.
  • Financial reporting – Poorly implemented finance and accounting robotic process automation can result in inaccurate or incomplete financial reports, financial restatements and reputational damage.

Cheney concluded, “Without strong internal controls, thoughtful change management, consistent oversight monitoring, and well-built bots in production, finance and accounting robotic process automation efforts can cause more harm than good. As with any strategic initiative, trying to find shortcuts is unwise. Investing time and attention to honing RPA is essential to realizing its full potential.”

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Consumer Trust in Autonomous Vehicles on the Rise

MD Staff

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Consumers are warming up to the concept of fully self-driving vehicles, but some roadblocks may lay ahead for automakers, according to the “2018 Deloitte Global Automotive Consumer Study.”

Safety first 
Consumers have a brighter outlook on the safety of autonomous vehicles, though concerns remain. Significantly fewer people in the 2018 study feel that autonomous cars will not be safe, with less than half (47 percent) of U.S. consumers holding this view — a dramatic decrease from 2017, when 74 percent felt autonomous vehicles would not be safe.

This view is consistent with other countries covered in the study, including: South Korea (54 percent this year vs. 81 percent last year), Germany (45 percent vs. 72 percent), and France (37 percent vs. 65 percent) who feel driverless cars may not be safe. The most notable change comes from China, where the percentage of people who think autonomous cars will not be safe dropped from 62 percent in 2017 to only 26 percent in this year’s study.

“Overall acceptance of autonomous technology has grown rapidly in just a short time,” said Craig Giffi, vice chairman, Deloitte LLP, and U.S automotive leader. “However, driverless cars are still in an experimental stage, and the industry is at the front-end of a long capital investment cycle required to bring autonomous vehicle technology to the mainstream market. To complicate that cycle, automakers recognize an immediate need to invest in areas including electrified powertrains, advanced light-weight materials, connectivity and mobility services. While the returns will be farther out, it’s important that automakers continue allocating resources to autonomous driving technology. Those who settle for a reactive mindset rather than preparing for the long term will be at greater risk as consumer acceptance for autonomous technology further accelerates.”

Building trust
Many people agree they would trust autonomous vehicles with a proven track record for safety. Almost three-quarters (71 percent) of U.S. respondents said they would be more likely to ride in an autonomous vehicle if they had an established safety record, up just slightly from 68 percent in the 2017 study. Other markets appear to be accelerating, however, with 83 percent of South Korean consumers (up from 70 percent in 2017), and 63 percent of German consumers (up from 47 percent in 2017) holding the same view.

Taking that a step farther, more consumers are turning to trusted brands for reassurance around the safety of autonomous technologies. Nearly two-thirds of U.S. consumers (63 percent) report they would be more likely to ride in an autonomous vehicle if it was from a brand they trust, compared to 54 percent in 2017. Consumers’ faith in brands appears to strengthen with younger consumers, as 70 percent of the Gen Y/Z population reported they would be more likely to accept a self-driving vehicle from a trusted brand, compared to 62 percent of Gen X and 56 percent of Boomer/Pre-Boomer consumers. “The auto industry battle between brands for consumers’ trust is on in a new and heightened way,” said Giffi.

In most regions, consumers favor traditional car manufacturers to bring fully autonomous vehicles to market. In the U.S., nearly half of consumers (47 percent) would put their trust in a traditional car manufacturer, compared to roughly one-quarter each that would trust a technology company (25 percent) or a new-to-market autonomous vehicle maker (28 percent). Consumers across Asia hold widely different views: In Japan, 76 percent trust a traditional car manufacturer to bring the technology to market, compared with 28 percent in China and 13 percent of consumers in Southeast Asia.

Not completely trusting the industry, many consumers would put their trust in federal regulation. More than half of U.S. consumers (54 percent) reported they would feel better about riding in self-driving cars if governments would implement standards and regulations.

Powertrain preferences
While consumers appear more apt to embrace emerging technology in the form of autonomous vehicles, many are brushing off newer powertrain options in favor of traditional engines. Most U.S. consumers (80 percent) still favor either a gasoline or diesel engine, up slightly from 76 percent in 2017, and only 15 percent said they would choose a hybrid engine in their next vehicle.

International consumers show a growing preference for alternative powertrains. More than one-third (38 percent) of Japanese consumers and 36 percent of Italian consumers would prefer a hybrid engine in their next vehicle, and 40 percent of Chinese consumers hold the same view.

“The economics of electric vehicles compared to traditional powertrains are presently not favorable enough for either consumers or automotive companies,” said Joe Vitale, global automotive leader, Deloitte Touche Tohmatsu Limited. “However, two significant trends could move us closer to the tipping point: battery cost reduction and government regulation. The trend toward mandating electrified powertrains — not merely demanding increased fuel efficiency or better carbon footprints, especially in Europe and China — lays out a ‘must-do’ path for global car makers. Also, as automakers simultaneously begin to broadly partner on building out the electric charging infrastructure and developing other value-added services that increase the convenience factor for consumers, electric vehicles can become a desirable alterative for most consumers.”

Deloitte’s research also finds that consumers are not willing to pay much more for autonomous vehicles. Deloitte’s most recent consumer survey data on the topic found that in countries such as Germany (50 percent), the U.S. (38 percent) and Japan (31 percent) consumers were unwilling to pay extra money for these vehicles. The findings were similar for electric vehicles, where 42 percent of German consumers and just over one-third of people in Japan and the U.S. said they are unwilling to cover additional costs to get alternative powertrain technology.

Giffi notes, however: “As exciting as autonomous-vehicle technology looks to be, and despite the current higher interest and acceptance of autonomous technology versus electric vehicles in consumers’ minds, government regulations look to be forcing the investment in electrified vehicle technology. At the same time, consumers around the world are consistent in saying they do not want to pay anything extra for either electrified or autonomous vehicles, leaving automakers with some difficult capital allocation and business model decisions if they expect to make any money at all.”

Deloitte’s study suggests that auto manufacturers developing and bringing advanced vehicle technology to market, such as autonomous vehicles, should simultaneously create new business models that can sustain an appropriate return on investment. Finally, given the over 1 billion conventional vehicles on roads around the world today, and the tens of millions that continue to be sold on an annual basis which are all expected to last well over a decade, the transformation to greater adoption of autonomous driving and electric powertrains will take quite some time to reach a tipping point. Automakers must balance ongoing innovation and new business models with the need to sell, service and delight today’s consumers with improved technology they are most willing to pay for in the near term, such as safety.

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