Relationship Advice for CIOs
Should you be courting your customers… or their devices?
In the award-winning movie ‘Her’ the protagonist, a lonely writer played by Joaquin Phoenix, develops a relationship with Samantha, an operating system and virtual assistant with the sultry voice of Scarlett Johansson and powered by artificial intelligence. The movie is now almost seven years old, but the underlying question of how humans can and should interact with digital devices is still a complicated rabbit hole.
Though this particular scenario from ‘Her’ might sound far-fetched, it is emblematic of growing consumer comfort with AI-based computer interactions. In recent years there has been a significant pivot from customer frustration dealing with an automated-but-clunky telephone customer service experience to now interacting seamlessly with AI-powered natural language voice recognition processing. In fact, Gartner predicts that by 2020 some 85% of customer interactions will be managed without a human.
But while Gartner’s forecast is focused on the company side of the equation — that is, AI replacing human customer service representatives — what if the roles were reversed? What if companies’ interactions with their human customers were instead replaced by interactions with those customers’ smart devices?
Businesses in particular are being forced to confront this issue head on, as customers invest in electronics and IoT devices at an ever-increasing pace.
Digital dating increasingly means a focus on devices, not people
According to IoT Analytics, we’re expected to hit 22 billion IoT devices globally by 2025. As we approach this shift, the struggle to form trustworthy and enduring relationships with human customers has grown into something new: companies of all kinds are now looking to build stronger bonds with customers’ digital assets. From banks, to healthcare providers, to mobile service companies, information technology professionals of all kinds are beginning to work through a similar challenge.
Consider, for example, the future of the mobility sector. As electric vehicles (EVs) grow in popularity, our cars are becoming more autonomous. Imagine this not-too-distant reality: your average EV now carries an onboard digital wallet, enabling it to pay for services like parking, tolls, and charging without the driver taking part. The need for an EV to carry out these sorts of transactions autonomously becomes even more crucial if the vehicle is shared between different users (think car-sharing programs). Now, the companies providing these services, like EV charging or parking, must build a secure and reliable relationship with these vehicles; the car itself is now the end customer.
We already have a glimpse into this future with cashless tolling on highways. A person-to-person payment between a car’s driver and a tollbooth attendant has been replaced by a machine-to-machine transaction between a tollway sensor and an on-vehicle RFID chip. But this is just the tip of the iceberg.
When devices become the seat of identity, blockchain plays a more-important role
The above scenario paints a picture of a world in which constant and countless transactions are taking place across a wide ecosystem of devices and service providers. This is where decentralized technologies like blockchain are becoming more and more valuable. Blockchains, at their simplest, are immutable records of data that allow digital information to be distributed and recorded with little to no risk of corruption. Although not all blockchain solutions are created equal, the right platform can securely and efficiently process low-cost transactions in a way that keeps business running smoothly.
Blockchain can also help in developing a core attribute of any good relationship: trust. In order to trust a device and develop a true one-on-one relationship, we need to know the identity of the asset. This could include details on its producer, operator, and/or owner. Decentralized technologies like blockchain make this possible. For example, standards for decentralized identity have already been developed by the W3C and are being used by companies building solutions like the ones I’ve described.
Today’s evolving energy sector provides yet another fitting use case for blockchain technology to act as the bridge between businesses and digital assets. As clean energy technologies continue their upward climb, customers (and their devices) will soon experience a role reversal of sorts. Through the use of distributed energy resources (DERs) — including solar panels, batteries, smart thermostats, EVs, and other technologies — customers will soon be doing more than just paying for electricity.
Customers will also be able to earn money for the excess power they generate. Or their DERs can provide other much-needed services, such as flexibility to balance supply and demand on our power grids. These are not ultimately interactions that will have human customers at one end of the equation. Instead, they’ll be based on relationships between grid operators and all the digital assets their customers have installed at their homes and offices.
Electric utilities are now grappling with the best way to handle these new transactions quickly and seamlessly, and many are turning to blockchain. Perhaps the creators of ‘Her’ were onto something; in a world where humans and devices co-exist, relationships can be tricky. And sometimes that object of your affection is not a human but rather a device. Thankfully, businesses get to navigate the non-romantic side, and blockchain is here to help. We’ll leave the rest to Joaquin and Scarlett.
Arno Laeven is head of strategy and market development at Energy Web Foundation.
