What payment innovators can learn from monkeys
If you are one of those people who have promised to change something in their lives since the New Year, then you will most likely break this promise in the coming weeks.
Do not worry, you are not alone in this.
By mid-February, 80% of people who promised to change their behavior from the beginning of the New Year, at best, will remember how they tortured themselves for a month and a half to achieve a new goal.
In any case, according to leading psychologists , the data of modern studies indicate exactly this.
There are many reasons why people find it difficult to keep their pre-New Year promises, starting with the tendency to set unrealistic goals, the unattainability of which becomes evident in the process.
But a deeper phenomenon at the heart of this process is the need to abandon old habits and form new ones. Such changes take time, especially when it comes to habits developed over the years.
According to researchers from University College London, on average, consumers need 66 days of continuous adherence to a new pattern of behavior. In general, this period may take from 18 to 254 days, depending on how strong this or that habit has become commonplace.
This explains why many fitness trackers, gym membership cards, exercise equipment, applications or books for physical self-improvement or financial growth acquired at the beginning of the year start gathering dust on the shelves closer to Valentine's Day, managing to get bored with their owners just in time big romantic dinner.
All these people simply do not invest enough time in learning new types of behavioral patterns for themselves to make them part of their routine.
And as a rule, their motivation is not enough to continue.
The findings of scientists also explain the warm attitude of consumers to some innovators in the payment sector and cold indifference to others. The reasons why voice and visual technologies, in particular with respect to authentication, have a very good innovative potential in the field of payments and commerce, are also becoming clear. And suppliers of such decisions will have an increasing influence on these areas in 2018.
In fact, we already see how this happens in the framework of various pilot programs and prototypes in retail, banking and commerce.
And this is why it happens.
In 2010, two scientists from the McGovern Institute for Brain Research at MIT published a paper that shed light on how an organ of thought makes decisions about maintaining or changing certain routine lines of conduct. Their work has been recognized as the first successful attempt of a scientific explanation of the reasons why such monotonous processes, or in simple words, habits, are carried out automatically and unconsciously by a person.
The researchers came to the conclusion that monotonous behavior patterns are formed based on how brain neurons process information about “labor-intensive” and the benefits of introducing this or that change.
In their work, they tried to approach the conditions of the “real world”, recreating them as part of an experiment. To do this, they chose monkeys as subjects, which were much easier (and cheaper?) To attract to the experiment than MIT students.
Another feature was that instead of first teaching the subjects to perform certain tasks, and after introducing changes, the researchers modeled for them a number of situations comparable in complexity to episodes from human daily life. The chosen method, in their opinion, was the best way to understand not only the mechanisms of formation of habits, but also the ways of their change.
The monkeys were shown large surfaces covered with white and green dots and rewarded them whenever they looked at the green dots of the grid. During the experiment, in which primates performed 1000 daily tasks for several days, the researchers changed the methods of displaying white and green dots.
Observations showed that the monkeys changed their behavior, starting to look at the green dots only when it took them a minimum of effort. The effort was calculated on the basis of the time and distance of the movement of the eyes to find the green point and get the reward. Shorter distances to the green point provoked stable changes in the previously established attitude to finding points.
In 2015, the same two scientists returned to the laboratory to delve into the study.
As a result, their new findings, first, confirmed the previous findings that the shortest distance between two points better contributes to behavior change. Secondly, they came to a new conclusion that the promise of reward would not help to change the behavior if the brain's neurons "decide" that the cost of change is too high.
In other words, large rewards do not have a long-term effect, or even have no effect at all in cases where behavior changes are too great. This observation did not lose its relevance even in cases where the monkeys did perform the action and were rewarded for it.
The researchers concluded that the monkey brain assesses all the pros and cons in real time, and the final change does not greatly depend on attempts to influence the decision by proposing a reward. What does this mean for the human brain? That money, rewards or the offer of free things may not be enough to convince a person to change the habit.
The more change it requires, the more likely it is that thoughts about time, convenience, and other natural advantages will have a stronger impact on the final decision.
And of course, for many years in our native payment and commercial sphere, we could observe exactly the same “automatic” behavior of consumers.
For 50 years, consumers have been motivated and trained to use plastic cards to pay for anything at points of sale. Now they know that wherever they go shopping, whether it is the largest of the supermarkets or the simplest family shop on the corner, their card will be accepted and it will work.
This is what explains any grumbling of owners of new cards with EMV chips, about delays in their work, because they have to be inserted into the terminal and wait for an answer, and not hooked as before. Nevertheless, despite the fact that delays in their processing can vary from small to very unpleasantly long, and also to the fact that the payment by swipe of the magnetic strip is still available in some places, the habit of getting the card makes itself felt and after two with half a year, we can say that EMV cards have taken root.
It is because of the power of habit that most mobile wallets, with the exception of some of the most worthy exceptions like Walmart and Starbucks, still cannot gain popularity, despite the obvious benefits of their use compared to EMV.
The thing is that, in the language of the above study, the cost of change is too high. Uncertainty about whether the majority of consumer’s favorite merchants have NFC modules in their terminals provokes the consumer’s brain to regard this change as dubious.
As a result, the consumer continues to use the time-tested method - a plastic card.
The same reasons provoke card manufacturers to invest in various improvements in the form factor of physical cards, such as, for example, the possibility of contactless payment or biometric identifiers. Well, consumers, merchants and issuers, in turn, appreciate the work of innovators who offer more computerization of digital versions of user accounts without requiring any other participants in the process to take any action in the process of collecting information.
For the same reasons, the phenomenon of mobile pre-order is gaining momentum.
Over the past five years, consumers are increasingly using mobile devices and applications to find and buy things. Mobile pre-order eliminates the unpleasant need to stand in long lines at coffee shops, fast food outlets, pizzerias or salad bars and offers the consumer great benefits at a low price. By pre-ordering on a smartphone, customers simply apply their online shopping habit to a new way of shopping, gradually forming a new pattern of behavior.
That is why remote payments can ultimately change the in-store shopping experience. Such a transition offers the consumer a very large reward, without demanding from him any very serious changes in behavior, since this is only a matter of the types of mobile preorders.
The same habits were made by Amazon, the e-commerce giant, on whose platform, according to the company's financial report for the 3rd fiscal quarter, more than 40% of all online purchases in the US occur, being number one place to look for products. Online shoppers immediately go to the Amazon site. It is convenient to use it, since absolutely everything that you need can be found there, without resorting to searching in other places.
Such popularity leads to the fact that consumers get used to voice communication with Alexa, which helps them to buy things right in their cars, phones, office, in the kitchen, in the laundry room and even in the toilet. Amazon's voice assistant is simple and easy to use, omnipresent, and thanks to the company's reputation, consumers trust it.
It is on such a model that another giant bets - Google with its similar offers from Google Home and "Ask Google".
According to Google data for 2016, consumers “asked Google” to find an average of two trillion times a year. This year, the company also reported that 15% of search queries were completely new . In 2007, this figure reached 20-25%.
Today, consumers have other places where they can ask questions, including social networks and Amazon for commerce. According to our 2015 survey, almost 60% of all search queries related to commerce began on Amazon. It is possible that today this figure has grown, getting closer to 70%.
But like Amazon with its Alexa, Google with its Google Home also allows third-party equipment and solution providers to take full advantage of their voice commercial ecosystem, and also offers preferences for merchants interested in competing with their biggest rival.
Today, voice technology is used primarily to simplify routine tasks. Consumers ask Alexa or Google Home to turn the lights on or off, lock or unlock the doors, turn on the music, find out how many cups are in a quart while cooking, add things to the shopping list, turn on the washing machine, and even, sometimes, flush the toilet. This is a way for consumers to use voice commands to do things they often still ask others to do. Instead of asking mom to turn on the lights or dad to turn off the TV, voice assistants can come to the rescue and do the same.
But what if, instead of a lock, a camera was built into the keyhole, scanning the iris of the house owner or trusted visitors? And what if this camera used biometric data to confirm that a request to lock or unlock the door came from an authorized visitor? What about integrating the authentication of this door with other commercial cases related to the various network-connected devices of such a smart home?
Let's see what plans Amazon has about Blink , the Boston company involved in external surveillance systems, which it bought last year. And it’s also interesting how it will show itself with the Echo Show - equipped with a screen and a TV-enabled device - especially since Prime and Alexa are available on Apple TV.
As we recently saw at CES, rear-view mirrors in cars were used to authenticate consumers by scanning the iris when they sat down in the driver's seat. This gave them the opportunity to make useful purchases on the way - to pay for gasoline, food at roadside fast-food outlets or parking tickets.
Or, as Amazon employees like to say, the very fact of the appearance of a client in an institution will in fact turn into the beginning of the purchase process in retail. A combination of voice and visual parameters in the stores will become a set of basic parameters for authenticating consumers entering the store in order to improve their service. And this preparatory process, which makes shopping safer and easier, will occur automatically and will not require any intricate actions from the visitor.
Modern consumers talk a lot or look at something in preparation for a commercial transaction. Innovations in authentication, digital commerce, and tokenization could significantly simplify an innumerable number of such cases by turning order registration into a part of the institution visit process.
This can be done by processing the natural behavior of consumers and creating prerequisites for digital payments based on their conversations, questions and attitudes.
Voice and visual biometrics have tremendous potential for turning commerce into a safe, context-based, customer-oriented experience, operating wherever there are network-connected devices and the ability to do business. It's not just about retail. Human minds are already working on the adaptation of the most complex technologies in the realities of banking, health care, insurance, government tasks and other areas.
The elegance of each of these solutions is that they repel old habits, not new ones, in order to make significant progress in their ecosystems.
And since we have already shown that this approach works well for laboratory monkeys, it means that it will certainly work for their more developed and clever fellow primates.
Do not worry, you are not alone in this.
By mid-February, 80% of people who promised to change their behavior from the beginning of the New Year, at best, will remember how they tortured themselves for a month and a half to achieve a new goal.
In any case, according to leading psychologists , the data of modern studies indicate exactly this.
There are many reasons why people find it difficult to keep their pre-New Year promises, starting with the tendency to set unrealistic goals, the unattainability of which becomes evident in the process.
But a deeper phenomenon at the heart of this process is the need to abandon old habits and form new ones. Such changes take time, especially when it comes to habits developed over the years.
According to researchers from University College London, on average, consumers need 66 days of continuous adherence to a new pattern of behavior. In general, this period may take from 18 to 254 days, depending on how strong this or that habit has become commonplace.
This explains why many fitness trackers, gym membership cards, exercise equipment, applications or books for physical self-improvement or financial growth acquired at the beginning of the year start gathering dust on the shelves closer to Valentine's Day, managing to get bored with their owners just in time big romantic dinner.
All these people simply do not invest enough time in learning new types of behavioral patterns for themselves to make them part of their routine.
And as a rule, their motivation is not enough to continue.
The findings of scientists also explain the warm attitude of consumers to some innovators in the payment sector and cold indifference to others. The reasons why voice and visual technologies, in particular with respect to authentication, have a very good innovative potential in the field of payments and commerce, are also becoming clear. And suppliers of such decisions will have an increasing influence on these areas in 2018.
In fact, we already see how this happens in the framework of various pilot programs and prototypes in retail, banking and commerce.
And this is why it happens.
What is needed for a new habit to take root?
In 2010, two scientists from the McGovern Institute for Brain Research at MIT published a paper that shed light on how an organ of thought makes decisions about maintaining or changing certain routine lines of conduct. Their work has been recognized as the first successful attempt of a scientific explanation of the reasons why such monotonous processes, or in simple words, habits, are carried out automatically and unconsciously by a person.
The researchers came to the conclusion that monotonous behavior patterns are formed based on how brain neurons process information about “labor-intensive” and the benefits of introducing this or that change.
In their work, they tried to approach the conditions of the “real world”, recreating them as part of an experiment. To do this, they chose monkeys as subjects, which were much easier (and cheaper?) To attract to the experiment than MIT students.
Another feature was that instead of first teaching the subjects to perform certain tasks, and after introducing changes, the researchers modeled for them a number of situations comparable in complexity to episodes from human daily life. The chosen method, in their opinion, was the best way to understand not only the mechanisms of formation of habits, but also the ways of their change.
The monkeys were shown large surfaces covered with white and green dots and rewarded them whenever they looked at the green dots of the grid. During the experiment, in which primates performed 1000 daily tasks for several days, the researchers changed the methods of displaying white and green dots.
Observations showed that the monkeys changed their behavior, starting to look at the green dots only when it took them a minimum of effort. The effort was calculated on the basis of the time and distance of the movement of the eyes to find the green point and get the reward. Shorter distances to the green point provoked stable changes in the previously established attitude to finding points.
In 2015, the same two scientists returned to the laboratory to delve into the study.
As a result, their new findings, first, confirmed the previous findings that the shortest distance between two points better contributes to behavior change. Secondly, they came to a new conclusion that the promise of reward would not help to change the behavior if the brain's neurons "decide" that the cost of change is too high.
In other words, large rewards do not have a long-term effect, or even have no effect at all in cases where behavior changes are too great. This observation did not lose its relevance even in cases where the monkeys did perform the action and were rewarded for it.
The researchers concluded that the monkey brain assesses all the pros and cons in real time, and the final change does not greatly depend on attempts to influence the decision by proposing a reward. What does this mean for the human brain? That money, rewards or the offer of free things may not be enough to convince a person to change the habit.
The more change it requires, the more likely it is that thoughts about time, convenience, and other natural advantages will have a stronger impact on the final decision.
Why changing consumer habits is not achieved by changing them
And of course, for many years in our native payment and commercial sphere, we could observe exactly the same “automatic” behavior of consumers.
For 50 years, consumers have been motivated and trained to use plastic cards to pay for anything at points of sale. Now they know that wherever they go shopping, whether it is the largest of the supermarkets or the simplest family shop on the corner, their card will be accepted and it will work.
This is what explains any grumbling of owners of new cards with EMV chips, about delays in their work, because they have to be inserted into the terminal and wait for an answer, and not hooked as before. Nevertheless, despite the fact that delays in their processing can vary from small to very unpleasantly long, and also to the fact that the payment by swipe of the magnetic strip is still available in some places, the habit of getting the card makes itself felt and after two with half a year, we can say that EMV cards have taken root.
It is because of the power of habit that most mobile wallets, with the exception of some of the most worthy exceptions like Walmart and Starbucks, still cannot gain popularity, despite the obvious benefits of their use compared to EMV.
The thing is that, in the language of the above study, the cost of change is too high. Uncertainty about whether the majority of consumer’s favorite merchants have NFC modules in their terminals provokes the consumer’s brain to regard this change as dubious.
As a result, the consumer continues to use the time-tested method - a plastic card.
The same reasons provoke card manufacturers to invest in various improvements in the form factor of physical cards, such as, for example, the possibility of contactless payment or biometric identifiers. Well, consumers, merchants and issuers, in turn, appreciate the work of innovators who offer more computerization of digital versions of user accounts without requiring any other participants in the process to take any action in the process of collecting information.
For the same reasons, the phenomenon of mobile pre-order is gaining momentum.
Over the past five years, consumers are increasingly using mobile devices and applications to find and buy things. Mobile pre-order eliminates the unpleasant need to stand in long lines at coffee shops, fast food outlets, pizzerias or salad bars and offers the consumer great benefits at a low price. By pre-ordering on a smartphone, customers simply apply their online shopping habit to a new way of shopping, gradually forming a new pattern of behavior.
That is why remote payments can ultimately change the in-store shopping experience. Such a transition offers the consumer a very large reward, without demanding from him any very serious changes in behavior, since this is only a matter of the types of mobile preorders.
The same habits were made by Amazon, the e-commerce giant, on whose platform, according to the company's financial report for the 3rd fiscal quarter, more than 40% of all online purchases in the US occur, being number one place to look for products. Online shoppers immediately go to the Amazon site. It is convenient to use it, since absolutely everything that you need can be found there, without resorting to searching in other places.
Such popularity leads to the fact that consumers get used to voice communication with Alexa, which helps them to buy things right in their cars, phones, office, in the kitchen, in the laundry room and even in the toilet. Amazon's voice assistant is simple and easy to use, omnipresent, and thanks to the company's reputation, consumers trust it.
It is on such a model that another giant bets - Google with its similar offers from Google Home and "Ask Google".
According to Google data for 2016, consumers “asked Google” to find an average of two trillion times a year. This year, the company also reported that 15% of search queries were completely new . In 2007, this figure reached 20-25%.
Today, consumers have other places where they can ask questions, including social networks and Amazon for commerce. According to our 2015 survey, almost 60% of all search queries related to commerce began on Amazon. It is possible that today this figure has grown, getting closer to 70%.
But like Amazon with its Alexa, Google with its Google Home also allows third-party equipment and solution providers to take full advantage of their voice commercial ecosystem, and also offers preferences for merchants interested in competing with their biggest rival.
Human brain and habits
Today, voice technology is used primarily to simplify routine tasks. Consumers ask Alexa or Google Home to turn the lights on or off, lock or unlock the doors, turn on the music, find out how many cups are in a quart while cooking, add things to the shopping list, turn on the washing machine, and even, sometimes, flush the toilet. This is a way for consumers to use voice commands to do things they often still ask others to do. Instead of asking mom to turn on the lights or dad to turn off the TV, voice assistants can come to the rescue and do the same.
But what if, instead of a lock, a camera was built into the keyhole, scanning the iris of the house owner or trusted visitors? And what if this camera used biometric data to confirm that a request to lock or unlock the door came from an authorized visitor? What about integrating the authentication of this door with other commercial cases related to the various network-connected devices of such a smart home?
Let's see what plans Amazon has about Blink , the Boston company involved in external surveillance systems, which it bought last year. And it’s also interesting how it will show itself with the Echo Show - equipped with a screen and a TV-enabled device - especially since Prime and Alexa are available on Apple TV.
As we recently saw at CES, rear-view mirrors in cars were used to authenticate consumers by scanning the iris when they sat down in the driver's seat. This gave them the opportunity to make useful purchases on the way - to pay for gasoline, food at roadside fast-food outlets or parking tickets.
Or, as Amazon employees like to say, the very fact of the appearance of a client in an institution will in fact turn into the beginning of the purchase process in retail. A combination of voice and visual parameters in the stores will become a set of basic parameters for authenticating consumers entering the store in order to improve their service. And this preparatory process, which makes shopping safer and easier, will occur automatically and will not require any intricate actions from the visitor.
Modern consumers talk a lot or look at something in preparation for a commercial transaction. Innovations in authentication, digital commerce, and tokenization could significantly simplify an innumerable number of such cases by turning order registration into a part of the institution visit process.
This can be done by processing the natural behavior of consumers and creating prerequisites for digital payments based on their conversations, questions and attitudes.
Voice and visual biometrics have tremendous potential for turning commerce into a safe, context-based, customer-oriented experience, operating wherever there are network-connected devices and the ability to do business. It's not just about retail. Human minds are already working on the adaptation of the most complex technologies in the realities of banking, health care, insurance, government tasks and other areas.
The elegance of each of these solutions is that they repel old habits, not new ones, in order to make significant progress in their ecosystems.
And since we have already shown that this approach works well for laboratory monkeys, it means that it will certainly work for their more developed and clever fellow primates.
Source: https://habr.com/ru/post/409669/