Many people equate digital identity with login. However, this can lead to missed business opportunities. When Identity and Access Management (IAM) is done right, it will grow customer engagement and, eventually, sales.
Digital identity is a collection of data about the user
Let’s start by understanding what a digital identity really is. It’s a combination of identification and profile data collected on a customer and an identifier that can be shared with sales processes and background systems. A user’s login information is also a part of their digital identity, but a small part: referring to login as digital identity is like referring to a front door as the whole house.
You can link a digital identity to information on the user’s relationship with other sales-related data. Typically, this information includes the customer relationship(s) connected to the identity. Customer relationship information in itself is stored in a customer relationship management (CRM) system.
Information on connections between digital identities can also be collected for utilization in service production and business operations. For instance, parents can be added as legal guardians of their underage children, enabling them to set restrictions on what activities or transactions the children can do in the system. Alternatively, transactions initiated by the children can be submitted to the parents for approval.
As these activities take place, the system can over time gain information on family connections. This allows organizations to understand their users better, but also creates a strong responsibility to handle the data with care and respect.
Customer information is the new plutonium — so take care of it
Data is the fuel of the modern digital business. However, if privacy issues are overlooked, this fuel could end up misplaced and create major risks.
Digital services should always inform the customer on how their data is used and ask for their consent in a clear way. A well-executed digital identity contributes to data privacy and improves the customer experience, thereby strengthening the customer’s trust in you. This also makes it more likely for customers to be willing to provide information on themselves and consent to their data being gathered.
When you connect an identified user’s transactions to a digital identity, you can take your knowledge of them as a customer to the next level. As long as you have gathered proper consent on disclosure of data, you can utilize customer information for analytics.
The value of cybersecurity is hard to understate when building your users digital identities. According to a 2020 report by PwC, 67% of consumers globally felt sharing their data offered benefits to outweigh the risks. At the same time, 85% hoped for more companies that would be trustworthy in handling said data. Consumers are no fools: they will work with you – but are also ready to switch to a competitor who offers more security.
In short, your user data is like plutonium: highly valuable when used wisely, but there’s no good way to explain how you’ve come to possess it in secret. Also, you never want to have to tell your users that any of it has fallen into the wrong hands. Show yourself to be the best data-handler in your field, and you are more likely to be trusted with this precious fuel.
Digital identities play a major role in digital business
Many operators — even large international ones — have not yet fully grasped the importance of the customer experience in the creation and utilization of digital identities. Those who have leveraged a data-driven approach to user and customer experience have reaped the rewards.
In an interview with Digital Journal, ForgeRock’s Senior VP of Global Business and Corporate Development Ben Goodman points to market leaders like Amazon, Target and Walmart. He highlights how Amazon has leveraged its amount of customer understanding to enable one-click purchasing and a highly streamlined UX. At the same time, the system can trigger a demand for strong authentication if the purchase seems suspicious and does not fit the buyer’s behaviour.
In contrast, many major online stores still create friction in their user experience. They rely on passwords for registration and login, and sessions created in their app cannot be accessed via a mobile browser. Typically, their systems do not support customer relationships based on family or agent relationships. On the other hand, the same user may have separate identities as a private and corporate customer.
A well-planned Identity and Access Management (IAM) framework helps you compile the information on your customers in a single location where it is easily available for business purposes. We can safely say that for digital business, the digital identity represents an essential bridge between a customer and customer information, contracts, and representation.
Smart IAM benefits everyone
Customer information accumulated through digital identities can give you a competitive edge over other operators in your sector. Well-handled Identity and Access Management (IAM) can benefit everyone: the citizen worrying about privacy, the customer seeking seamless digital services, and the service provider reaching for higher sales.
Are you curious about what Nixu can provide your company in the field of digital identity? See our services or download our Access Governance whitepaper to learn more.