Trust, security and business benefit – Consumer identities done right

The Digital Transformation is a game changer for many traditional organisations and a business enabler for many new trading companies and service providers in the digital world. When dealing with consumers and customers directly the most important asset for any forward-thinking organisation is the data provided and collected for these new type of identities. The appropriate management of consumer identities is of utmost importance.

Handing over personal data to a commercial organisation the consumer typically does this with two contrasting expectations. On the one hand the consumer wants to benefit from the organisation as a contract partner for goods or services. This should be as efficient as possible at a sophisticating level of user experience. Customer-facing organizations get into direct contact with their customers today as they are accessing their products and services through various channels and deploying various types of devices. It is essential to know the relevant attributes of that customer at the right time. The reasons for this are obvious: An improved user experience leads to customer satisfaction and thus to returning customers. User self-service leads to high effectiveness and cost-efficiency while speeding up processes.

Selecting the right items of information and a proper understanding of the quality and reliability of that data are essential management tasks. Customer identities are the result of the ongoing consolidation of data from various sources, including initial registration information, payment data, search requests, purchase history or helpdesk interaction. Consumers use various devices to access required services and they use different accounts in different contexts. Data gathered from external sources can be outdated, partially inaccurate or even deliberately wrong or misleading, especially when collected from social media. Business-relevant information is a superset of several types of information, including business-internal information, which has to be consolidated and assessed well.

On the other hand, the act of providing personal information to a commercial organisation will only be possible when the consumer can expect the required level of trustworthiness and security being applied to personal data. Trust is essential and losing this trust will inevitably endanger the business model and thus threaten the existence of an enterprise. This has been made evident by the high number of recent, massive data breaches. And losing trust into e.g. an online picture printing service or the payment card service provider potentially corrupts trust into many types of online services.

The key challenge is finding the right balance between collecting and consolidating all business-relevant data for the benefit of the consumer and the organization itself, while acting as a trusted custodian of data the consumer has entrusted the organization with. When aiming at long-term sustainable customer relationships it is mandatory to integrate the proper handling of collected, personal data into all business processes, while being compliant to regulatory requirements and data protection laws. This has to be accompanied by a continuous review and improvement process as security and compliance are evolving processes themselves.

This article has originally appeared in KuppingerCole Analysts' View newsletter.



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