France Identité and the New York mobile driver's licence project are two examples of digital identity projects that need to be monitored more closely.
The growing need for connectivity and collaboration in an increasingly globalized and digital world should not blind us to the adversaries that users, companies, and verification technology developers face.
n recent years, we’ve witnessed a significant shift in how individuals identify and relate to the world around them. Real identity, based on documentation and physical presence, has given way to digital identity, based on information stored online and virtual interactions.
Identities (how we understand them, use them, what they reveal about us, how many exist) have embarked on a fascinating journey: from the simplicity of IDs and face-to-face interactions to the complexity of proving who we are in a digitized world, with an infinite catalogue of services at our fingertips with just one click. While digital identity offers numerous advantages in terms of convenience and efficiency, it also poses challenges concerning privacy, security, and the protection of personal data.
Tackling the dreaded fraud: KYC and organizational strategies
According to a recent survey by McKinsey, companies conduct at least 80% of customer contacts digitally. The surge in interactions inevitably reflects a rise in fraud attempts and identity theft. According to the same study, 67% of banking customers would switch institutions if they fell victim to fraud. This unacceptable percentage should prompt companies to reconsider how they approach verification processes and how much importance they place on preserving sensitive customer information.
For every new method introduced (real-time agent assistance, geolocation, biometrics, automatic cross-checking against sanctions lists, etc.), a different fraud technique emerges, or a more sophisticated version of an existing one. Hence, it is critical to strengthen corporate protocols from three perspectives:
- Proactivity: It means staying vigilant and prepared to combat potential security threats before they occur, taking preventative measures to ensure the safety of users and the organization itself. A proactive approach would include implementing advanced security measures, intelligently combining multiple methods, or constantly monitoring for potential security threats. Additionally, activating crisis resilience plans and dealing with adverse events require a solid commitment from the entire team.
- Education: This aspect can be addressed in various ways. For instance, providing information and resources to users to help them protect their personal and financial information. This may include advice on creating secure passwords, avoiding phishing emails, or safeguarding devices against malware and other online security threats. It can also involve developing training programs for company employees to keep them updated on the latest security threats and teach them how to detect and prevent possible attacks.
- Innovation: Keeping up with the times and embracing change will be key to reducing fraud rates and delivering increasingly powerful services. Given its flexible nature and ability to grant individuals control over their identity, the focal point is decentralization. Nevertheless, it’s certain that companies and providers will need to work hard to leave behind old habits, such as the need to open a new account for every service.
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Optimal verification and access experience
Adding layers of security to a digital identity strategy might offer an easy solution for ensuring maximum security, but it could lead to a cumbersome customer experience, ultimately harming the brand image if excessively intrusive. Each identification method may entail different requirements and verification procedures, resulting most likely in a confusing and frustrating process. In addition, the use of multiple methods can be difficult to manage, increasing the complexity of the identification process and potentially causing errors and delays in verifying a customer’s identity, thus negatively impacting service quality. Technologies should strive to employ a unified identification method, with robust security layers (life tests, biometric recognition, etc.), that is easy to understand and use. Society should look squarely at identity orchestration, a more holistic and user-friendly way of understanding verification processes, rather than adding more layers of authentication.
Identity orchestration is the solution to fragmented visions discussed earlier. Instead of using multiple identification systems, identity orchestration relies on a single powerful engine with an integrated and centralized approach to manage and control access to an organization’s systems and applications. This allows for much more effective granting of user permissions, regardless of the system or application they are using. Proper orchestration involves analyzing various identification “signals” in a coordinated manner, enhancing data security and privacy, operational efficiency, and overall costs, as opposed to managing multiple systems separately.
Digital identities with limitations: silos of technology
From mobile document verification to geolocation, biometrics or liveness detection. Finding the most effective solution can be difficult, as many established or emerging verification methods focus on only one (or not all) use cases. This leads to the creation of technological silos that are difficult to integrate and maintain within an organization.
The term “technological silo” refers to the practice of keeping technologies or information systems isolated and independent from each other, without interconnection or integration with other systems or technologies. This may result from a lack of collaboration and communication between different teams or departments in an organization or may stem from the adoption of closed, proprietary technologies that are incompatible with other solutions, leading to the phenomenon known as Vendor Lock-in.
The consequence of this practice is that data and information remain trapped in isolated systems, making it difficult to access and utilize them by other teams or departments. In addition, it can hinder the updating and maintenance of information systems, which inevitably leads to increased costs. Silos are behaviors that impede efficiency and collaboration within an organization and must be addressed through technology-focused planning that is flexible and integrated.
Digital transformation will continue to surprise us, compelling all sorts of companies to shift their relationships with customers and safeguard our online identities. Managing entrenched issues like rampant fraud and technological fragmentation is essential for citizens to trust technology industries. To achieve success, not just in terms of profitability, companies should be the primary catalysts of trust, embracing innovation while prioritizing responsibility and societal education.
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