“What is Digital Identity?” is a question that every new online user wonders about. In short, an online representation of a person, organization, or device is called a digital identity. It includes attributes distinguishing it from other entities available on the internet. An individual’s identity often includes date of birth, user name, gender, etc., with which one associates.
The identity is usable for accessing online accounts, purchasing, communication, and other purposes. As technology evolves, fraudsters develop new and sophisticated methods of tampering, hacking accounts, or misrepresenting identities, making it crucial to involve secure identity verification methods.
The Vast Usage of Digital Identity
Digital identity usage is vast, from availing online services to combatting fraud. However, the most common uses include:
Nowadays, opening an online financial account requires submitting valid identity proofs, followed by a facial scan, form filling, and document verification from the source or using an AI algorithm. The approach has become very common in the BFSI industry. A unique identity of the account holder is created on the webpage app of the service provider, offering seamless access through face recognition or any other credentials.
Incorporating face, fingerprint, eye, voice, or other biometric recognition technology in the digital identity system has significantly revamped the security of global organizations. Biometrics are a unique set of characteristics that are challenging to replicate, keeping cybercriminals at bay. Simultaneously, its seamless integration has made accessing accounts, premises, or devices convenient for the end user.
Availing Financial Services
Individuals who want financial services must undergo Anti-Money Laundering (AML), Know Your Customer (KYC), and other regulatory compliances as part of the identification and verification process. The digital identity authentication system is re-established during high-risk transactions.
Digital identities linked with face or fingerprint recognition systems allow airport authorities to verify the credibility of the traveler, spot people on the watchlist, avoid queues, pass through kiosks seamlessly, and more. Digital identities linked with e-passports are being used to offer customized experiences to travelers based on their past bookings.
What Methods are Used for Verifying Digital Identities?
User verification in the digital world happens via document, biometric, email, device, or social login checks. The verification helps to keep fraudsters at bay and secure accounts associated with personal information from being misused in any way. Let us dive deep into the commonly used approaches to identity verification.
Biometrics: The face, fingerprint, palm, voice, eye, or other biometric characteristics of an individual are used for authentication. Biometric-linked accounts are considered highly secure compared to others, as biometrics are unique and not easily replicable.
Email: Using digital emailing accounts like Gmail, Microsoft, Yahoo, etc., is one of the most common practices. It is used for creating multiple online accounts. Email service providers offer two-factor or multi-factor authentication for securing accounts.
Social: Facebook, Twitter, LinkedIn, and other social media platforms also offer the privilege of recreating digital identities or verifying a person’s online credibility. Registration through social accounts offers the advantage of passwordless authentication; however, linked accounts can become vulnerable if the passwords of the original social accounts get stolen.
Device: Another common method of establishing an account holder’s authenticity is verifying via a device such as a smartphone or tablet. A pop-up, OTP, or link generally appears on the device for the end user identification.
Document: Uploading digital documents or scanned government identities has become a common Know Your Customer (KYC) practice as it helps to establish a high level of end-user credibility. Document verification uses AI algorithms, QR scanning, or other methods.
Although the methods of verifying a digital identity might seem a bit lethargic, the usage or the application of online identities is vast.
Benefits of Verifying Digital Identities
The risk of identity theft and fraud is increasing significantly every year. In 2022, 27.2 million adults became victims of identity theft in India. Companies associated with hacked accounts get fined, lose customers, and more. Digital identity verification offers a range of advantages, including minimizing instances of identity theft.
Enhanced End User Experience
Account opening or registering becomes much simpler and faster with digital identity verification. The end user undergoes a one-time frictionless and time-saving process without the hassle of manual form filling, attachment, or submission with systems that derive information using Optical Character Recognition (OCR) technology. It also diminishes the account opening abandonment rate of the service provider.
Minimizes Identity Theft and Fraud
Digital identity verification helps to reduce the chance of identity theft and fraud by demanding proof of validation, such as a government ID, face scanning, OTP on a registered number linked with an online document or identity, etc. Such methods help to avoid hacking even if a cybercriminal gets access to a name, address, social security number, and more. Biometric digital identity verification during the KYC process prevents banks from recreating new accounts or taking advantage of healthcare privileges.
Regulatory Compliance & Mitigates Risks
Digital identity frameworks help the end user follow one-time registration with the added benefit of account operation on multiple devices without secondary registration. Biometrics, passwords, devices, etc., are part of the interoperability standards, allowing seamless integration between different services and organizations. Multimodal functionality offers on-the-go operability, enhancing the end user’s convenience.
Besides these benefits, digital identity verification offers privacy and control, revamp efficiency, seamless transactions, personalization, facilitates benefits & services, and more.
Digital identities are a crucial part of every organization. A secure identity verification process helps to establish trust and security in enterprises while adhering to government compliances. However, the biggest advantage of having a secure ID verification framework is that it minimizes the risk of identity theft and fraud, keeping the organization’s reputation intact.
Biometrics, OTPs, pop-up messages on devices, and other methods have been incubated into the ID authentication systems in addition to existing passwords to achieve higher security. The two-factor or multi-factor authentication makes accounts less vulnerable to hacking.
Businesses must adhere to evolving identity verification technologies as they also heighten the end user’s convenience. Biocube’s contactless biometric innovations are a step in this direction. Contact us to experience our next-gen technology at your organization.
What is digital identity?
An online representation of a person, organization, or device is called a digital identity.
What are the common attributes of a digital identity?
A digital identity commonly includes date of birth, user name, gender, etc.
What are the common uses of digital identities?
The most common uses include combatting identity fraud, availing financial services, enhancing security, etc.
What are common methods of verifying digital identity?
User verification in the digital world happens via document, biometric, email, device, or social login checks.
What are the benefits of verifying digital identities?
Digital identity verification offers a range of advantages, including minimizing instances of identity theft.