In a study of seven countries published in 2019, the McKinsey Global Institute estimated that providing digital identities could result in added economic value equal to as much as 13% of GDP by 2030, save 110 billion hours via e-government services, and help the estimated 1.7 billion people who remain without access to formal financial services - often as a result of a lack of documentation. Businesses could meanwhile benefit from improved efficiency, lowered costs and fraud reduction, and save up to $1.6 trillion thanks to digital identities, according to the study.
When every transaction in life is digital, it better have a connected identity that responds to safety, security and sanctity of privacy. Essentially becoming the doorway to connecting between industry and extended ecosystems.
Enterprises started on the concept of identity management from the perspective of identifying individuals with their job roles from the on-boarding to the off-boarding process; when it became centric to the enterprise operations. Now digital is becoming centric to the society and the future of work demands being anywhere on this planet and yet the talent accomplishes the delivery of a unique engagement and experience to a customer in a digital app.
As the above illustration demonstrates, it is essentially extending the three P's: Profiling, Personalizing and Preferentiating into the manifestation of data that is a combination of demographic, psychographic and biographic. Apart from identification, authentication, authorization, access, permissions and privileges it will also serve the purpose of last mile securitization, privacy protection and geo sensitization.
As enterprises create life and enterprise digital applications that fall into the zone of industry and extended industry ecosystems, the component of digital identity of an individual will become a critical shared resource across various applications. It would become mandatory to have the ability to capture the related data.
Connecting the universe of customers would mean creating role based access to systems of people and machines that will interchangeably perform the activities of the connected processes in real time. And thereby allow customers intelligent and intuitive interaction that is context sensitive. The key point to distinguish from the previous economies is the extended relationship with the customer universe across the alpha, beta and theta versions of life and enterprise applications. Where the compulsion to address life applications is driven by the proliferation of digital technologies such as IOT, sensors, devices, wearables and intelligence. The enterprise digital applications are essential microservices and data that is transactionally owned.
Extended Ecosystem Connection
The United Nations Economic Commission for Africa and the African Union Commission are working together to increase the regional harmonization of digital identity standards, as part of the process of developing the African Continental Free Trade Area - the largest free trade area in the world in terms of participants. Within the private sector, South Korean mobile phone operator SK Telecom has developed “T-Auth,” which is designed to streamline online shopping by linking it to users’ mobile numbers; 99% of the country’s websites accept the service, and by late 2016 it had 13 million monthly users making 650 million transactions annually, SK Telecom said in a report published in 2017. Meanwhile in Sweden financial institutions have developed “BankID” for things like identification and account access, tax declarations, and document signing. BankID has an estimated 8 million active users; however, in 2018 14 people were found guilty of stealing the equivalent of about $160,000 by calling users, pretending to be a bank representative, and having the users log in to BankID while on the phone. Stakeholders in all sectors and industries should create collaborative business models, shared principles, standards, frameworks, and identity systems that are genuinely interoperable.*
The growing use of digital identities online - in combination with the massive volume of personal data increasingly being collected by governments, businesses, and everything from wearable devices to household appliances - creates vulnerabilities. According to the Breach Level Index, an online database, more than 15 billion data records have been lost or stolen since 2013, and the 3.4 billion compromised records in the first half of 2018 alone represented a 72% increase compared with the same period a year earlier. High-profile breaches in recent years include the compromised data of nearly 150 million people at credit-reporting firm Equifax, for which the company agreed to a $700 million settlement, and the 30 million identity numbers (and associated financial information) leaked online in South Africa in 2017. Meanwhile new threats continue to emerge: according to the US Federal Reserve, the fastest-growing financial crime, “synthetic identity fraud,” involves using fake information to establish a bogus credit file and then make transactions. Several approaches have emerged to better secure identities and build resilience, including minimal data collection and disclosure, and informed consent. Bolstering digital literacy and helping people better understand the need for password-free, multi-factor authentication can also help.
We believe digital identity management as a foundational step for every enterprise. This must be a key area that is addressed as part of its priorities in digital transformation initiatives. Schedule an dialog today with an archents expert to address this topic in detail. Write to firstname.lastname@example.org
*Source: World Economic Forum