The digital disruption has fundamentally changed the way customers interact with companies and organizations. Today, people conduct their everyday work online, bank online, shop online, as well as access health and education services. As a result, digital identity management has become a major element of online living.
Data security is more critical than ever, and consumers expect enterprises to invest in the protection of their personal information. Not only this, but efficient management of the numerous online identities that organizations contend with can result in several benefits for businesses. It can improve ROIs, increase efficiencies, and differentiate your company from competitors.
Consumer behavior has evolved to favor digital interactions, and as a result, the amount of data that organizations hold continues to grow. Brands can reap the benefits of this by pursuing data analytics to better understand their customers. However, to win and retain them, they must pay attention to privacy obligations and keep the prevention of cybercrime at the forefront of business objectives.
Read on to learn more about digital identity management, what it is, and why your brand can benefit from it.
What Is Digital Identity Management?
Digital identity management, also known as identity and access management (IAM), is a set of technologies and processes that allow for the secure sharing of user information and personal data online with companies and organizations.
It ensures that user information is only collected by those with the required permissions and allows enterprises to verify user/device identities and secure them. Digital identity management might therefore involve approving user credentials via usernames and passwords or granting access to online materials based on IP address, device authentication, visitor tracking, etc.
With the increasing use of mobile and digital devices, digital identity management has become a crucial issue for every organization operating online. Comprehensive systems are necessary to avoid theft of information and ensure that digital interactions are seamless and secure.
Whether your business operates via internal systems, on the cloud, or with a hybrid form, specialized identity-as-a-Service (IDaaS) need to be implemented to ensure the protection of your customers/users, employee data, and company information.
Indeed, with the upward trend in remote working, credential theft and phishing have become unavoidable issues to mitigate against.
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How Does Digital Identity Management Work?
Digital identity management works according to these six essential building blocks.
Provisions
The first step of secure digital identity management is setting up access granting and user sign-up/ registration provisions. A user is created on the system and, with that, so is their digital identity. From here, administrators can grant certain accesses and privileges depending on that user’s identity or role within an organization.
Authentication
Authentication is the next step; it involves the verification of a user’s identity in order to access certain online pages or materials. This can be as simple as requiring the entry of user credentials like usernames and passwords or be more complex and involve more robust identification methods.
These can include multi-factor authentication or two-factor authentication like SMS-sent confirmations, one-time passwords (OTP), and QR/ PIN codes; or even advanced biometric authentications like fingerprint scanning, vein pattern recognition, gait analysis, and behavior biometrics like the tracking of clicks and mouse movements.
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Authorization
When authenticated, a user is authorized for access to certain privileges. Systems can routinely check if users have access to protected data and put rules in place for access. For example, a robust access management system will check the role of an individual within an organization before allowing rights to materials reserved for specific employees.
Administration / lifecycle tracking
Administration or lifecycle tracking refers to the constant reviewing and checking of accesses. This can include updating a user’s access to information, revoking access, or even deactivating digital identities that are no longer in use.
Federation
Federation refers to the technique of allowing authorized users access to multiple systems and domains using a single set of credentials, i.e., the same login information. This is especially useful for organizations with both an on-premises and cloud-based system.
Reporting and auditing
Finally, enterprises should continually monitor their digital identity management systems to maintain security, prevent breaches, and ensure systems always comply with the required governing standards.
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Why Do You Need a Digital Identity Management Strategy?
A digital identity management strategy is essential to secure customer data, protect your employees, and keep outside contractor/supplier information safe.
1. Protects against fraud
Identifying customers and employees means you can take steps to protect their data and avoid digital identities from being stolen. Your organization is responsible for the information it stores. Thus, you’re protecting yourself in the process.
2. Secures customer information
The best way to keep customer information secure is to know who is accessing it. Consider updating your enterprise security when upgrading from traditional identity systems to cloud-based versions. Right from the start, think about how security can be built into your programs.
3. Meets compliance requirements
When you operate online, you’re operating internationally. You’ll need a digital identity management strategy that understands and acts consistently when abiding by different laws and regulations concerning data privacy.
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What Are the Benefits of Digital Identity Management for Businesses?
Depending on your organization type, you’ll likely reap significant benefits (both operational and financial) by implementing proper digital identity management for customers, clients, and employees. You’ll find below three reasons why you should develop a digital identity management strategy.
Enhanced user experience
For brand growth, it’s especially important for companies to provide a superior user experience for customers. Digital identity management ensures that user experiences are smooth, that it’s easy for users to register, and it streamlines the payment and purchasing process.
A positive digital experience can turn first-time purchasers into long-term customers. However, they need to feel secure pursuing transactions with your company and trust that their personal data is being handled securely.
Digital identity management also allows you to collect more accurate information on users and leverage this to create a better picture of your customers. From here, you can tailor your marketing to your target audience and personalize the sales process.
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Improves brand reputation
Data protection is paramount to improving your brand credentials and reputation. If potential customers are aware of your commitment to data privacy they’ll be more inclined to trust your brand and therefore make purchases from your online platforms.
Data leaks, breaches, and hacks can have a detrimental effect on your company’s standing. Consumers remember when their privacy has been compromised and are reluctant to repeat business with organizations that have been lackluster in their privacy protection efforts.
Increased sales
According to PwC, 71% of consumers won’t purchase from a company they don’t trust. Strong digital identity management helps your company achieve high privacy standards and thus establishes your brand as reputable and trustworthy.
You can also use the data gathered via digital identities to improve customer journeys and user experiences and therefore improve loyalty and sales over time.
Reduced cost and improved efficiency
Digital identity management cuts costs by streamlining processes through a centralized automation and governance process. You reduce manual and paper-based processes and simplify storage, access, and security.
You’re improving both your remote working experiences and online shopping options with validating and registration systems that can provide customized access to files or tailor customer promotions based on their personal information. All this improves the way your enterprise functions.
Better employee experience
Alongside the customer experience, digital identity management enhances the employee experience with easier onboarding, electronic documentation, and tailored access to resources depending on employee roles, permissions, and clearance levels.
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Securely connects your organization
Identity management systems connect every part of your organization digitally. It allows for easy access from anywhere, users just need their IDs and passwords, and to follow any required security or authentication steps.
It also does this in the most secure way, protecting your data and that of your clients. Controlling access and incorporating encryption methods for every individual user means companies can keep track of data and constantly monitor access thereby reducing cybersecurity threats.
Conforms to regulations
Putting digital identity management systems in place strengthens the overall compliance of your company when it comes to privacy and data safety. You’re safeguarding your employee and client data and also meeting the requirements of data protection laws, GDPR, PCI DSS, and HIPAA standards.
You should also endeavor to use GDPR-compliant web analytics services like Google Analytics and Google Analytics competitors to further protect data shared on the web.
Improves your credentials and growth
Identity authorities and systems that manage digital identities are an essential part of growing your brand. They ensure that your organization can scale digitally and via the cloud without risking data breaches and other security issues.
They also show your company’s commitment to protecting the data it collects. This boosts your credibility with clients and ensures your business maintains control. You can keep track of reporting, see in real-time which users have access, and thus improve your compliance with governance and auditing at the same time as fostering trust with potential customers.
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Digital identity management ensures you’re collecting user data in a responsible way and that you can still leverage customer information to the advantage of your business.
You’ll improve your brand credibility by demonstrating that you can be trusted with user information and build long-term relationships and loyalty by using data to perform analytics and target audiences with tailored marketing and personalization.
Alongside improving the customer experience, you’re setting your organization up for growth internally. Digital identity management creates a framework of security that can expand as you scale your business. It allows you to maintain compliance with international regulations at the same time as improving efficiencies for your employees with easy but robustly protected remote sign-in processes.
