Ultimate magazine theme for WordPress.

Identity as the linchpin of the digital economy

Not so long ago, identity was not really a concern in the financial services ecosystem or in the economy at large. A decade later and several thousand data breaches later, these identity frauds have had a profoundly compelling effect on the industry in ensuring that the person on the other side of the screen is who they claim to be. In fact, Philipp Pointner, Chief of Digital Identity at Jumio, told PYMNTS that the industry has both matured and driven by the needs of the moment.

“Identity has come at the center of a lot of considerations,” he noted. “The pandemic has given it a further boost in importance and is the linchpin for a better digital economy.”

It’s a rethink that Pointner said was easily seen in the $ 4.5 billion IPO of biometric screening company CLEAR a few weeks ago that marked the unprecedented demand for ID verification after 18 months of pandemic digitization reflected.

This was both a remarkable opportunity and a huge leap forward, but Pointner also brought new challenges, particularly with customer data security. That shift meant that the ability to properly verify the identity of the person at the other end of the screen was quickly becoming critical for any business looking to join the digital economy.

“When you start doing business with someone – whether they are opening an account or continuously – knowing who the other person is in front of the screen becomes more important than ever,” Pointner said.

The change in the way identity is made

The state of the art moves away from what Pointner called the older established identity model, which uses certain data – like social security numbers, addresses, names, and dates of birth – to confirm who is who.

“I think everyone understands now that all the data they want is out there,” he said. “The fraudster trying to open a fake account is not trying to impersonate any particular person – they just want to impersonate anyone who is not. Any complete data set available would meet this need. “

He found that the move to replace all of this easily compromised data is a more “document-centric” method of authenticating one’s identity, in which those documents are cryptographically stored, making them essentially useless to fraudsters. In addition, it offers consumers an easier and more convenient way to sign up instead of having to enter the same information over and over again.

According to Pointner, the best way to counter a data breach is to find a better standard for consumer authentication that is less prone to compromise.

The way forward

Regarding what’s next, Pointner said that while there aren’t any crystal balls, it is likely that we’ll see an expansion of advanced identity authentication tools across the web – and in places we didn’t expect them to be before . Once it’s ubiquitous and everyone has a digital identity on their phones or computers, he predicts that many more websites and service providers will ask for an identity.

They don’t do it now, he noted – not because it isn’t beneficial, but because they are afraid of creating friction in their processes and because they don’t like the economy behind it.

But that’s changing, Pointner said – the lower cost of access to the technology, the increasingly combined power of global regulators over consumer ownership of their data, and the fact that consumer identity blocking also helps keep fraudsters out.

“There’s so much going on in the field of digital identity; it’s such a hot place right now, ”he remarked. “I think the signs are clearly suggesting this is going mainstream.”

———————————

NEW PYMNTS DATA: GENERATION SUPERCONNECTED – THE COMING USER AUTHENTICATION SHIFT

About the course: Super connected consumers use a variety of connected devices to interact, shop, and pay online, but say password-based authentication slows them down. PYMNTS surveyed 2,127 consumers and found that these highly connected, highly desirable customers want financial institutions (FIs) and merchants to give up the password and provide a better, more secure way to authenticate online.

Comments are closed.