Understanding the ETTO Principle<\/h6>\n
According to Hollnagel, organizations and individuals operate under the constraint that they cannot be both efficient and thorough at the same time. When pressed for time, results, or performance, they make trade-offs. Efficiency often wins.<\/p>\n
These trade-offs are not inherently wrong. In fact, they are necessary. The danger lies in making them by default. The KakaoPay and Apple Pay case shows what happens when these decisions are made invisibly, without governance.<\/p>\n
The Two Layers of Assurance<\/h6>\n
1. NSF Scores: Operational Assurance<\/strong><\/p>\n KakaoPay and Apple Pay deployed the NSF (Non-Sufficient Funds) score to predict payment risk. This is a form of operational assurance: using data science to prevent fraud, chargebacks, and transaction failures. It is an efficiency-driven move, intended to protect the business and users alike.<\/p>\n But the algorithm was powered by user data – emails, phone numbers, account balances – transferred daily to Alipay servers in China. No consent was sought. No data protection impact assessment (DPIA) was conducted. No regulatory checks were in place.<\/p>\n 2. Privacy Compliance: Regulatory Assurance<\/strong><\/p>\n In contrast, Regulatory assurance<\/a> focuses on ensuring that systems operate within legal and ethical boundaries. It requires transparency, accountability, and explicit consent for data processing, especially cross-border.<\/p>\n In this case, the privacy policies were outdated. Users were not informed of data usage. Internal governance did not flag the overseas data transfers. The very act of assuring one type of risk (financial) violated another (regulatory).<\/p>\n This is the ETTO principle in motion. Each decision prioritized speed, automation, or predictive power over the slower, more burdensome work of compliance and governance. And each trade-off went undocumented, unacknowledged, and ultimately, unmanaged.<\/p>\n In telecoms, assurance is the operational embodiment of thoroughness. Because sacrificing too much thoroughness results in good efficiency KPIs but it is also a generator for leakages.<\/p>\n Hollnagel never claimed that thoroughness is always better than efficiency. Trade-offs are part of real-world operations. But they must be made consciously<\/strong>, with governance mechanisms that account for what is being sacrificed.<\/p>\n The core failure in the KakaoPay case was not just a privacy error. It was a systems failure: no one paused to ask, \u201cWhat are we trading away by optimizing for speed and predictive accuracy?\u201d<\/p>\n To prevent future failures of this kind, organizations need governance frameworks that make ETTO trade-offs visible and deliberate.<\/p>\n This reframes assurance itself: not as a checkbox or department, but as a system of balance between competing priorities. A system that governs when speed wins, and when it shouldn\u2019t.<\/p>\nHow ETTO Caused the Regulatory Breakdown<\/h6>\n
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<\/p>\nETTO Is Not a Flaw – But It Must Be Managed<\/h6>\n
Toward ETTO-Aware Regulatory Assurance<\/h6>\n
ETTO-Aware Governance Practices:<\/h6>\n
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Institutionalize Dual Assurance:<\/h6>\n
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