How do you establish identity and make accurate trust decisions in the blink of an eye?
So far, we’ve mentioned digital identity in passing. Now it’s time to take a closer look.
Digital identity is a dynamic authentication technology designed for businesses that transact online. It’s also an anonymous authentication mechanism. Unlike authentication based on static credentials, a digital identity cannot be lost or stolen. It’s also impossible to fake.
Whether it’s a user setting up an account for the first time, logging in to do business, or making a digital payment, digital identity allows businesses to make highly accurate trust decisions in real time.
In the next chapter, we dig into the details of the data used to create a digital identity. Here, it’s important to understand that it is based on hundreds of dynamic and anonymized data elements.
Digital identity understands each user’s history and the way they behave across multiple websites and applications. At the same time, to protect privacy, data elements that comprise a digital identity are anonymized using a sophisticated process called tokenization. This process replaces sensitive data with non-sensitive equivalents that cannot be converted to personally identifiable information (PII), and thus have no exploitable meaning or value.
Using behavioral history, digital identity establishes real-time, dynamic relationships between people and their associated devices, locations, credentials and offline identity details, such as billing addresses, phone numbers and shipping information.
Over time, these relationships and connections grow and evolve to form a complete and highly reliable picture of each user that can be used to verify identity and recognize returning users with up to 95-percent accuracy.
How Digital Identities Can Help Businesses:
Protect customer logins and transactions
Reduce fraud losses and manual reviews
Gaming & Gambling
Block collusive play and comply with regulations
Protect critical infrastructure and secure remote logins
Protect sensitive health information
This is all made possible thanks to the advent of advanced machine learning, which establishes normative behavior patterns as baseline context for assessing identities at the point of each transaction.
By comparing this context with the specifics of a given transaction, digital identity can determine if a user’s identity is legitimate and then render a trust decision in the blink of an eye.
Some of the online information digital identity leverages to do all this is widely available and, in fact, built into the way the Internet works. But, until now, it had not been mined for dynamic authentication.
Additional data comes from the transaction itself. The marriage of all of this rich, anonymized information gives businesses the ability to verify the identity of users and make accurate, risk-based trust decisions in milliseconds.
The decision-making power of this kind of intelligence is enormous.
For instance, digital identity can instantly spot fraudsters based on their past activities, completely unrelated to the transaction at hand. By detecting anomalies buried deep in the technical nature of an interaction, digital identity can identify scammers who are impersonating legitimate users.
These and other criminals can then be blocked, even when they’re using valid identity credentials. Legitimate users never notice a thing—it all happens transparently and without introducing friction into the digital experience.
Digital identities play a key role in risk-based authentication (RBA). This report from Forrester describes how and also explores the RBA vendor landscape.
For businesses, the ability to make instant and accurate trust decisions at scale means they can now deliver a whole new level of convenience, cost savings and speed to a wide range of digital interactions.
Some will enhance routine, everyday activities, such as enabling consumers to easily and securely access bank accounts via mobile devices.
Others will drive disruptive change in industries where those that have achieved first-mover advantage are already shifting market dynamics—and where unwitting competitors will have to adapt or get left behind.
Today, online retailers use digital identity to improve the customer experience and securely accept cross-border transactions from a growing number of regions – all while reducing fraud rates without the need for additional fraud management staff.
A new generation of fintech lenders prevents the use of stolen identities to take out fraudulent loans, reducing the time needed to process and approve mobile and online applications to just minutes.
In a want-it-now world, this kind of real-time responsiveness draws consumers and businesses away from slower, mainstream providers that simply aren’t geared for today’s digital economy.
How Digital Identities Can Help Businesses:
Accelerate underwriting and prevent fraud
Prevent fraud and support instant loan approvals
Prevent fraudulent accounts and bogus content
Accelerate secure transactions and improve merchant onboarding
Prevent fraudulent reservations and stolen rewards redemption
This revolution is taking place in every industry. Health care providers authenticate patients, physicians and payers in real time, while protecting sensitive patient records. Payments providers secure transactions, reduce chargebacks and improve merchant onboarding.
Online gaming and gambling providers shut down collusive play and block problem gamblers. And government and private organizations secure critical infrastructure and internal business systems from Internet fraudsters and cybercrime rings.
Perhaps most important, digital identity help trusted users achieve what they set out to do without distracting them with needless authentication challenges. They get what they want quickly and without having to jump through hoops to prove their identities.
Next up: Digital DNA