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Digital identity = digital currency

Digital identity = digital currency

By Michael Gaffney

Your digital identity is currency. It can be monetized. In an increasingly complex digital society, one of the biggest challenges for businesses is how to capture that identity.

Currently, totally beyond the control of consumers, a myriad of technologies and companies are scraping data, watching online activity, phishing, and working tirelessly to reveal – sometimes even steal – your digital identity. Your “digital identity” is the sum of all the available information about you and is growing exponentially; at the same time, big data capabilities are keeping pace in an effort to analyze all this information, your information.

The evolution of digital identities is a concern for consumers and merchants alike. On the one hand, consumers are concerned about privacy and losing control over their personal data. On the other hand, companies are increasing worried about data breaches – be it their own or third-party applications and the effects on breaking the trusted relationship between merchants and consumers.

In February 2014, it was reported in Forbes that the cost of the data breach at Target was $61 million. Target cautioned investors, “At this time, the company is not able to estimate future expenses related to the data breach.” The breach at Target, resulting in the loss of tens of millions of digital identities has had a massive impact on value for its shareholders, not to mention consumer confidence.

It’s cold comfort for Target and the shoppers impacted that at least they’re not alone, as evidenced by this infographic of the World’s Biggest Data Breaches.

The growth rate for ecommerce far exceeds traditional economies, whose growth rates are flat to shrinking. Consumer trust is one of the cornerstones of commerce for a merchant, especially in this age of digital identities. The ecommerce world with its real-time availability, product reviews and ability to rapidly provide consumers with substitute products is a dangerous place for merchants who cannot generate trust in their products and their interactions with consumers. Protecting the digital identity of consumers is paramount to maintaining that trust.

Opt-out is considered standard practice – in fact it is legislated in many jurisdictions – as a way for consumers to control their private data. Opt-in is typically used when the data required is even more sensitive. Studies have shown that consumers want control of their data but there is juxtaposition against convenience.

Consumers are willing to share their data with private and public organizations – conditional upon privacy controls and sufficient currency benefits. Trust, plus deals that consumers like, will cause them to spend and invest in their digital identities for the merchant’s currency.

For merchants to engage the consumer – to cause them share their digital identity to unlock value – companies need to epitomize and communicate a new digital identity perspective of — responsibility, transparency and the consumer in control.

(Image: flickr, Alan O’Rourke, link)

Posted in: Blog, Data breach, Identity

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