Digital Identity: What it means for your business

Last week we went into detail about what digital identity is and what it means for the individual. Let’s take a closer look and consider what digital identity means for your business.

Even before we found ourselves shifting to more of a digital focus due to a global pandemic, our world was becoming increasingly virtual. Many of us found driving to the store to pick up groceries or the mall for a gift for a birthday to be a chore we could no longer fit into our busy schedules. We relied on virtual banking for our financial needs. We appreciated any opportunity that offered us the ability to streamline our day.

Operating in this increasingly digital world, with an increasing demand for security, your business needs to swiftly verify the identity of your users and customers.

No matter your area of business, there is an opportunity for your data to be compromised. Those with nefarious intent on their mind don’t belong in the various online ecosystems that make up our digital world. Your business has a responsibility to efficiently verify the digital identities of those relying on you.

Broadly speaking, there are three key points that are driving your business imperative to integrate highly secure digital identity solutions.

Trust: Above all

Your users and customers assume that your business will have taken the steps needed to help protect their data. But it does go somewhat deeper than that, with a flip side of trust. In several industries, your online users could be interacting with each other. It doesn’t matter the reason for their interaction, trust is going to be the linchpin of every interaction. Buying, selling, renting, hiring, banking, dating, gaming. Trust is woven into every part of the interaction and transaction.

The very foundation of this trust is establishing that the individual who is on the other side of their transaction is actually who they say that they are. Your online users quite often share a significant amount of identifying information  through every online interaction. Your business has to help secure it, to help protect it.

Fraud: A constant risk

Going hand-in-hand with the identity information your online users are sharing is the risk of it falling into the hands of would-be fraudsters. As an increasing array of digital data is housed online, so increases the risk that all of this identity information can be accessed by fraudsters.

Fraud does not just impact your online users and customers. It can and does certainly take a financial toll. However, fraudulent online transactions can lead to billions of dollars in corporate losses.

Whether $20 or $20,000,000 in losses, can your business truly risk it?

Compliance – essential not just mandatory

Many companies simply don’t think about security and digital identity verification unless it’s being mandated on a corporate or even industry level. Consider a regulation that was put into place in the EU as of 2018. It mandated that businesses take steps to help protect both the privacy and personal information of all EU citizens, for any transaction that takes place within the member states of the EU. Companies are required to offer top-tier protection across the board when it comes to customer data.

While the United States is not quite there yet for a sweeping policy, the financial industry is one that may have increased compliance requirements your company needs to be aware of. States like California are also working to fight against online fraud and to validate customer identity verification.

The California Consumer Privacy Act (CCPA) aims to help boost consumer protection and privacy rights for all California residents.

These are just two examples of what is driving the need for businesses to establish a robust link between the real world and the digital identities of their online users and customers.

Doing away with old school approaches to identity verification

The majority of businesses rely on a mix of classic security measures to get the minimum level of assurance that their customer’s real-world identity matches what they are portraying online.

What might this look like? Think of it as a three-pronged approach: something your online user knows, has, and is.

  • Knows could include a password or a security question.
  • Has could include an identification document, a phone number, or a cryptographic key.
  • Is could include the customer’s biometric data.

While effective for many years, in many ways, this model does present some issues. Many organizations have a disproportionate focus on what their users know or have. The trouble is that things that you know, whether your security questions or passwords, can be dug up through social engineering, phishing, or on the dark web. Things that you have, which could include your mobile number, can be compromised or changed.

If your business is just asking your customers for a copy of their driver’s license or a phone bill to prove their identity, you are asking for the wrong information. Why, you wonder? You’re asking if this individual is who they say they are, versus who they actually are. What if they are using a copy of a stolen driver’s license? What if they have fraudulently created documentation?

Your business needs to have the knowledge that the individual who is interfacing with your service and your other users is actually who they claim to be, at that moment. Increased protection and security means moving away from identification methods that lean on shared verifications such as personal data and knowledge questions.

What are the right questions to ask?

Who are you?

Are you truly who you claim to be?

Are you still who you claim to be?

These are the questions that your business needs to be asking when it relates  to  verifying digital identities. The answers to these questions will come via interconnected processes.

  • Identity verification from the onset. Identity verification will confirm your customer’s connection between their real world and their digital identity. This will take place at the start of the relationship with the customer, i.e., during enrollment or opening an account.
  • Ongoing user authentication will maintain that the user who logs into the account at a later date is the very same individual who first opened the account.

With emerging technology solutions, businesses are able to integrate biometrics into both the identity verification and authentication process. This will help to provide the answers to the three questions. Incorporating biometrics with the traditional identification verification methods can help your business to bolster your defenses against the potential for online fraud. It can help to establish and continue to build user trust in your online ecosystem.

A robust combination of verifying that someone is who they claim to be can allow your business the freedom it needs to operate in a highly secure manner in our increasingly digital world.

Resources

https://www.fbi.gov/scams-and-safety/common-scams-and-crimes/internet-fraud

Ready to learn more? Start a conversation with one of our knowledgeable professionals.