Companies across multiple vertical sectors are encountering challenges and opportunities that are shaping the future direction of consumer identity-centric business. Faced with the erosion of revenues from the rapid encroachment of challengers into their traditional market strongholds, many companies are realising that data represents their most significant asset to provide added value to their customers in the future. Key to this transformation will be how companies manage users’ digital identity data better and position themselves as secure identity brokers/providers in a highly competitive market. The enterprise’s data sources are as diverse as billing and payments, the CRM database, web portals, social media and customer services which can then be translated with good analytics into improving the customer experience and relationship as a whole. The most transparent business opportunities are driven by insights based on user behaviour which when connected to business processes can drive actions. When automated and real-time, decision-making becomes quicker and more efficient.
For most businesses, leveraging consumer identity profiles was not seen as a value added service or a revenue generator. But it’s recommended for that to change by:
- Exploring ways in which to refresh or cement relationships with customers by reaching out and offering new identity-based services.
- Collating and analysing the data that exists across customer-related databases to provide comprehensive profiles that can be shared with users.
- Working with regulators to benefit from the new EU legislation on electronic identities, authentication services and data protection that will be mandatory in 2018: those companies that embrace the changes early can turn the regulation to their advantage.
Until recently most users were oblivious to the personal information held by the public and private sectors, which when collated through sophisticated analytics offered comprehensive and often revealing profiles. Or at least they were. With the recent revelations on data breaches, users everywhere are very concerned about the security and the privacy of their online identity personas. The Snowden revelations inter alia have revealed the susceptibility of the records kept by governments as well as the private sector. It is only a matter of time before all organisations’ data handling comes under scrutiny, added to which the EU is bringing in legislation to harmonise how data is handled by all companies operating in Europe.
Today it’s clear that being a formal identity provider would not even cover the necessary infrastructure costs. But, given the revenue shrinkage elsewhere and the fickleness of customer loyalty, with cheaper alternatives emerging to providing key products and services, this is an ideal time for more companies to step forward and embrace the emerging requirements of digital identity management.
All industries are going to be affected by the legislative changes in digital identities, trust services, privacy and data protection that are coming to both the public and private sectors in Europe. Many businesses may consider becoming identity service providers as a luxury rather than a necessity to remain in business and succeed, but, if the opportunity is taken, the results could well turn out to exceed expectations.
This article has originally appeared in KuppingerCole Analysts' View newsletter.
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