In an analogue environment, identifying yourself is pretty simple. When you go physically to a bank to open an account, book a flight or make an appointment with your dentist, you are usually required to present a valid identification card. The company you are doing business with will want to be sure that you are what you claim to be.
In the digital world, the traditional version of you has a digital identity. This digital ID enables you to open a bank account, book a flight or make an appointment with your dentist without physically going to their places of business.
Our daily personal, professional and business lives are ever shifting to digital. Digital identity is key to a safe and secure experience in the online world. But what is digital identity really?
What is digital identity?
There is no single definition of digital identity. The U.S. National Institute of Standards and Technology (NIST), World Bank and World Economic Forum each have their own concept of digital identity. We hope the following is a simple but all-inclusive definition of digital identity.
A digital identity is a set of unique features and characteristics identifiable to an individual, organization or digital device used for transactions, interactions and representations online. It is essentially any personal data existing online that can be traced back to you.
For example, your online bank account, posts you’ve created, liked or commented on, photos you’ve posted to social media or your browsing preferences are items found online to identify you.
What are digital identifiers?
Your digital identity includes various pieces of information that can be used to identify you. They come in two general categories: your digital attributes and your digital activities.
Digital attributes or characteristics are personally identifiable information (PII) found in online records. PII are often used when you’re enrolling in school, applying for a job or registering a business. They can be any or a combination of the following:
- Date of birth
- Home address
- Email address
- Government-issued ID documents, such as a passport, driver’s license or Social Security number
- Login credentials to various online accounts
- Badges or tokens
Digital activities refer to all the things you do online with your mobile, laptop, tablet or any electronic device, such as the following:
- Browsing history
- Uploading photos, posts and comments on social media
- Online selling and shopping
- Doing virtual conferences, meetings, trainings and the like
- Studying online
- Downloading apps
- Uploading videos, blogs or vlogs
- Doing remote work, and many more
What makes up a digital identity?
We can further break down the two general categories of information that can identify you into context-based characterizations. These interpretations often depend on use cases or the purpose of the digital activity, such as the following
1. Digital identity as credential
Digital identity as credential includes standard information for traditional identification such as those found in birth certificates, driver’s licenses, passports and school records. They can be any of the following:
- Date of birth
- Home address
- Email address
- Valid IDs
2. Digital identity as character
Individuals and organizations shape their online character through the activities they do online. They create and solely control their online profiles from their commentaries, photos they upload and other self-portrayal actions. The information include:
- Social media profiles
- Networking activities
- Career and achievement updates
3. Digital identity as user
This category involves the digital behavior of an individual that reveals habits, interests, preferences and priorities. These actions can be determined from:
- Websites visited
- Email newsletters opened
- Webinar participations
- Online shopping
4. Digital identity as reputation
This concept reveals an individual’s historical data from public records sourced from established authorized third parties. The information includes:
- Degrees, diplomas and other educational achievements
- Employment history
- Credit scores
- Recommendations, citations and testimonials
- Criminal and other court records
Why is digital identity important?
Trust is the most important currency in the digital world. Digital identity helps build trust between providers and consumers.
Digital identity enables consumers to use online tools comfortably, giving them access to essential services. It helps improve the user experience while securing basic services, such as access to healthcare, education, voting services and benefit programs.
Similarly, organizations, businesses and governments need trusted digital identity from consumers to ensure that they are providing products and services to the right individuals. In other words, digital identity helps build a trusted environment where all parties are happy.
What is the value of digital identity?
Digital identities have no fundamental value on their own. They exist as part of an ecosystem that validates and requires them in all online activities. Their function involves pointing back to specific individuals, organizations or devices. But when they are available in the wild (dark web) the individual elements do have value. Particularly to bad actors.
When used in this context, digital identity becomes a valuable contributor to the overall security of online networks. More specifically, digital identity value manifests itself in the following ways:
Digital identity enables certificate authorities to validate you and your organization
Certificate authorities, or CAs, are reputable third-party organizations recognized by the Certification Authority Browser Forum, or CA/Browser Forum, to verify digital identities based on real world information.
Once certified by the CA/Browser Forum, CAs look into official records which include your company name, address, contact details and other company information. They are also responsible for finding other information from outside sources to help them validate your digital identity.
If everything is in order, your CA then issues a website security certificate, known as Transport Layer Security (TLS) certificate or Secure Sockets Layer (SSL) certificate. TLS/SSL is the standard security technology that keeps logins and online transactions secure.
You know that your TLS/SSL certificate is working to secure your digital identity if you see a padlock and “HTTPS” as you type your domain name in your browser. It will look something like this:
But if you see an exclamation point inside a darkened triangle on the browser, it means the website is not secure, as illustrated below:
Having a verified digital identity allows you to prove to other parties that you are the real you
Having a digital identity without the TLS/SSL certificate doesn’t make you or your organization secure. That is why you need a reliable third party, such as a certificate authority, to verify that you are the real you.
Without verification, anyone can attempt to impersonate you or your company and trick naïve users into believing the impersonator is you. He or she could set up an imposter website that mimics your website. Or create a fake email account and bogus social media profiles to convince users that those fraudulent accounts belong to you.
In short, verification establishes the legitimacy of your digital identity and proves to the whole online world that you are the real you.
A verified digital identity helps identify and avoid the bad guys
Phishing and other fraudulent online activities have incredibly increased since the start of the covid pandemic. In its Phishing Activity Trends Report for the fourth quarter of 2020, the Anti-Phishing Working Group disclosed that:
- The number of phishing attacks grew and doubled through 2020
- The average amount of wire transfer requests in business email compromise scams increased from $48,000 in the third quarter to $75,000 in the fourth quarter
- Financial institutions, webmails and SaaS sites were the top targets of phishing attacks during the fourth quarter
- Phishers used deceptive techniques to fool users, including using domain names of known brands, using encryption to create a false sense of security in users, and spoofing email addresses of trusted companies and contacts
For the bad guys, pretending to be a legitimate company is easy — it’s their trade. All they have to do is buy a domain name that resembles the name of a popular brand and get a free domain validation (DV) certificate from a non-profit certificate authority.
Or, steal identities and personal information, with bank account numbers, credit card details and Social Security numbers being the favorite targets.
According to the Annual Data Book of 2020 of the Federal Trade Commission, instances of identity theft rose to 113% from 2019 to 2020. Credit card identity theft alone increased by 44.6% from a little over 270,000 in 2019 to almost 400,000 in 2020.
These and many more identity theft statistics show that cybercriminals are always looking for creative ways to be in step or get a step ahead of established security protocols. A verified digital identity helps drive the bad guys away.
Keep your company network protected with a legitimate digital identity
Your organization’s internal IT system is as important as your website. Keeping an eye on the digital identities of your users and the connected devices in your network can help you detect any suspicious activities taking place on your network. Monitoring these resources helps you mitigate potential network-related compromises and data or identity theft.
Digital identity helps streamline processes
Protecting the usernames and passwords of your network users can be overwhelming. The storage and management of login credentials can be a cause of disagreement between users and the organization. A centralized digital identity can eliminate this conflict.
A smoother, more secure digital identity processing also helps create a faster customer onboarding process. Today’s customers are more impatient than ever. A fast ID verification can sweeten your customers’ opinion of your business.
Digital identity gives customers increased access to products and services
A uniform digital identity system enables customers to access more products, services and records as well as faster connection with people and essential entities. Many countries are moving toward the adoption of a standardized global digital identity system that transcends borders and simplifies international commerce and travel.
Digital identity helps improve security
Compromised personal information and account credentials can result in identity theft that can have severe consequences for users. A strong digital identity scheme helps protect sensitive information and mitigate potential exposure to risks and threats.
How is digital identity created?
A digital identity starts with the gathering of basic credentials that establish an individual’s identity. This may be a birth certificate, passport or driver’s license. Through the process of tokenization, sensitive data is replaced with a string of meaningless characters.
Digital identity creation involves the following steps:
An individual’s identity attributes can be captured via identification documents and biometrics.
Identification documents may include a national ID, passport or driver’s license. Image analytics then extracts the individual’s name, birth date, home address and other relevant data.
Biometric capturing devices include mobile phones, web cameras, tablets, kiosks and specialized fingerprint and facial scanners. These devices are used to capture biometric attributes such as facial recognition, finger and hand geometry recognition, iris recognition and voice recognition.
The main goal of verification is to confirm the authenticity of an individual’s identification documents and biometrics to validate his or her identity claim.
After capturing the identification documents and biometrics, the identification system uses dedicated software to compare them to the stored model.
The last step involves the creation of the digital ID after ensuring that there is a match between the individual’s identification documents and biometrics.
What is trusted digital identity?
A digital identity is trusted when the information provided has been verified and checked for authenticity. Remember that digital ID is a technological link between a real entity and its equivalent digital entities.
People own many digital identities that come in the form of usernames, email addresses, passwords as well as biographic and biometric data. In some cases, such as in social media, some people use pseudonyms to protect their identity. They can use unverified digital identities that are not trusted.
However, when it comes to critical areas, such banking and government services, people need a trusted digital identity to prove that they are what they claim to be in their real world identity.
A trusted digital identity consists of a set of verified attributes, such as authenticated documents and biometrics. It may also involve verification with government, employment, school or social media databases.
Such rigorous verification and authentication processes make digital identities trusted. And when they are trusted, they enable smoother digital workflows, improved customer experience and reduced operating costs.
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Why traditional approaches to digital identity verification are not enough guaranty of cybersecurity
Most businesses use traditional structures and approaches to verifying their customers’ online identity. These structures may include:
- Passwords or security questions (Something customers know)
- Smartphones or special tokens (Something customers have)
- Biometrics (Some that are inherent in customers)
Businesses have been heavily relying on the first two models. These approaches have their own set of vulnerabilities that cybercriminals can exploit.
Passwords and security questions can be stolen and sold in the black market. Smartphones, SIM cards, badges and other possessions can be misplaced, damaged or lost. SMS-based one-time passwords can be intercepted by hackers through phishing attacks or via the SS7 Signalling protocol network.
Massive data breaches of even giant brands like Yahoo and Facebook have sent hundreds of millions of personal data spilling into the dark web. Things like usernames, passwords, telephone numbers, bank account and credit card numbers, email addresses and credentials, dates of birth and many more are awash in cyberspace.
Modern businesses are now moving toward biometrics for more secure digital identity verification. But wait, biometrics alone is not even enough now. Fraudsters have found innovative spoofing techniques that can break biometric security systems and come up with something close enough to the real things.
In light of the global nature of cybercrime, providers of identity authentication have developed innovative verification solutions. For example, facial biometrics can be a formidable technology when paired with liveness detection powered by artificial intelligence and video selfie solutions.
What is digital identity verification?
Digital identity verification is the process of validating people’s identity traits to prove that they really are who they claim to be. This may sound simple, but it needs some sophisticated anti-fraud technology.
In the age of the Internet where the majority of the world is digitally connected, businesses across all industries are gravitating around digital infrastructures to better serve their customers. Digitally identity verification, thus, becomes an imperative for a more secure experience for both businesses and customers.
Banks need digital identity verification during the account opening and customer onboarding process. They run checks to ensure that the new client is not a fraudster or criminal planning a scam. And it’s even more difficult to onboard a physically distant customer.
For travelers, digital identity verification speeds up the process of scanning their passports at the e-gates of airports.
Online sellers and buyers enjoy more convenient and faster transactions using digital identity verification.
How does digital identity verification work?
The verification process works in several ways. It is usually done by comparing something the person has, such as an identification document or biometric data, with a verified data set, such as government records. Specifically, the methods include the following:
- ID document verification: Verifies that the ID documents are legitimate.
- Biometric verification: Uses selfie technology to determine that the individual presenting the ID is the same individual whose photo appears on the ID.
- One-time password verification: Sends an OTP via SMS or email to the applicant during the verification process.
- Knowledge-based authentication: Asks “out of wallet” questions taken from the applicant’s personal files stored in various databasess. If the applicant is a legitimate individual, the answers to the questions will be easy. If the applicant is a fake, he or she will give the wrong answers.
- Trusted identity network: Refers the applicant’s submitted credentials to other established entities, such as a past service provider, to check if the information submitted matches those with the provider.
- Database verification: Leverages data from offline databases, social media, government records and other sources to cross-check the information submitted.
- Liveness detection: Liveness detection is a verification method using artificial intelligence software to determine if the computer is interfacing with a live human, and not a robot, spoofed thing or injected video or portrait.
What is digital identity management?
Digital identity management is the process of safely collecting, storing and accessing the personal information of an organization’s customers and employees based on a set of rules.
A comprehensive approach to digital identity management can help drive business while making life easier for cybersecurity teams and ensuring seamless experiences for customers and employees.
From a cybersecurity point of view, managing digital identities enables organizations to take control of access to company data. This means that only authorized personnel should have access to information depending on their role in the company. The cybersecurity team may be given more access than the customer service staff. Customers should be given quick access to what they need in a secure environment. But low-level and high-risk users should be limited to information that matches their roles.
Potential threats to digital identity
Identity theft is the most common threat to digital identity.
People use their digital identities for almost everything they do in their daily lives. They use them when they access their bank accounts, visit their healthcare providers or chat with their friends on social media. They do all these in cyberspace where prying eyes are eagerly waiting to steal their personal information.
And how is digital information exposed? It happens in many vulnerable places, such as:
- Unsecured websites
- Public Wi-Fi networks
- Phishing emails
- Weak passwords
- Third-party data breaches
- Downloading malware-infected apps
- Adding strangers to social media accounts
Hackers know where to look and they have a vibrant market where they can dump their hacks. — the dark web. Social Security numbers, bank account information, credit card credentials and medical records are all out there for anyone’s grabbing, some at a bargain.
How can you protect yourself from identity theft?
Every time you go online, you provide your personal information to access the accounts you need. If you do this in an insecure environment, you’re opening yourself to vulnerabilities that criminals can exploit.
However, there are ways to protect yourself from identity theft and many of them are cheap and simple. Below are some of them:
Always use strong passwords
To make it strong, use a combination of upper and lower case letters, numbers and symbols. Make it long to at least 15 characters. Avoid common substitutions, such as WH337 for WHEEL and don’t use sequential keyboard paths, such as qwerty. In short, create a password with random character placement.
Never provide personal or financial information
Your trusted bank will never ask for your bank account number. Your service provider will never ask your account name. Your employer will never ask how much salary you’re receiving. The reason is common sense. They already know all this information about you. So if someone purports to be them asks, you should be suspicious.
Avoid downloading software from unknown websites
It is often tempting to download software that promise sweet little things or pop ups that offer great deals. These may actually be programs that contain malware that can steal your identity credentials.
Never post personal information online
You should keep your date and place of birth, address, names of family members and other sensitive information to yourself, especially on social media networking sites. These are breeding grounds for hackers to perpetrate their evil schemes.
Don’t leave a paper trail of your financial transactions
Shred credit card, banking transactions and other financial documents with sensitive personal and financial information. Nor leave them on your office desk or throw them into the waste bin unshredded. Don’t keep your Social Security card in your wallet and carry only the credit or bank card you need at a time.
Monitor your credit
Credit card theft is the most common cyber theft because of the massive data branches that are happening worldwide. Check your credit card statement for any unknown activities or inaccuracies. Make sure you recognize the purchases, merchants, locations and other related information. If there are any discrepancies, immediately report them to your credit card company.
Use antivirus and anti-malware software as often as possible
Antivirus and anti-malware software help detect, flag and remove viruses and malware. The software contains a database of all known viruses and malware. Once it detects any, the software isolates and removes them.
How can companies use digital identity to protect their business?
Nowadays, more employees are working remotely and more individuals are doing business almost entirely online. This means good business, but it also means more digital identities to manage securely.
The worst fear of every ecommerce business is having someone mimic their website. When this happens, it’s bad enough that businesses lose customers, but it is even worse because they’re losing their reputation, too. And what does this mean if the trend is unchecked? Loss of income, or closure of business all together.
Here are positive ways companies can leverage to protect their business:
#1. Install TLS/SSL certificate on your website
A TLS/SSL certificate is a website security certificate issued by a certificate authority to ensure logins and online transactions are secure. This technology makes sure that information transmitted to a user’s browser, or information that is transmitted back to the web browser, is encrypted.
#2. Use email signing certificates
An email signing certificate is a digital file that allows users to digitally sign their email communications. It also enables users to encrypt the email content and all attachments included in them. It authenticates the identity of the sender to the receiver and protects the integrity of the email before it is transmitted.
#3. Use PKI client authentication
PKI, or public key infrastructure, is a technology for authenticating users and devices. It certifies that a particular cryptographic key belongs to a specific user or device. So that if a cybercriminal attempts to penetrate a system, the PKI client authentication tool will block it, keeping the business safe.
#4. Train employees to verify digital identity
Frontline employees need to be trained, and trained properly, to verify digital identity especially during the onboarding phase. They need to establish that the new customer is someone he or she claims to be. This is a crucial task because starting on the wrong foot may wreak havoc to the security protocols set in place.
Our final thoughts:
An effective digital identity management program breaks down barriers and builds collaboration between business and the customer. It is a win-win situation in which businesses achieve their financial and security goals and customers attain the ultimate online experience in a secure environment.
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