Digital Identity as an Asset




By Imran Hajimusa, Technology & Business Leader, Exponent

 

If data is the new currency that is driving the digital economy, then your digital identity is an asset that needs to be treated and protected like all other valuable assets.

In fact, it is such a valuable asset that the other day the Governor of California floated the idea of Data Dividends. He argued that companies should share in the wealth that is created from the user data because it has value and it belongs to the users.

Ideas like data dividends are not new. For example, countries in the European Union are considering imposing a Data Tax on digital advertisements that are targeted towards their citizens. Asian and Latin American countries are not far behind and are pushing for similar digital taxes.

It is not a secret that the majority of internet-based companies use ARPU (Annual Revenue Per User) as one of the key metrics to measure their financial success. A simple query on a search engine for flights from San Francisco to London triggers a number of actions that not only provide you with the search results but also monetize your query by splashing your screens with advertisements that can help you buy tickets, reserve hotel rooms and even book a rental car.

It is important to understand that it is not just a matter of taxing the companies for using consumer data. A more important aspect is how to protect the privacy of consumers who may or may not have given explicit consent to use their personal data.

Europe has recently rolled out GDPR (General Data Protection Regulation) that puts constraints on what kind of user data can be collected, stored and how it can be utilized. The California Consumer Privacy Protection Act is scheduled to go live next year and we are seeing similar regulations mushrooming around the world.

The importance of digital identity is not limited to free services. It requires even more sophisticated level of security when we use our credentials to do financial transactions, conduct e-Commerce or remit money across borders.

Service providers that provide financial transactions are required to implement KYC (Know your Customer) and AML (Anti-Money Laundering) regulations.

Upcoming privacy laws will require financial institutes to walk a tightrope of managing AML and KYC compliance and at the same time protect the privacy of the consumer.

Enterprise, healthcare and government are some of the other segments that each also mandate that their particular security and privacy requirements are met.

Today, the majority of online authentication methods use passwords. The challenge of remembering multiple identities and passwords has popularized the use of unified logins where different service providers delegate the identity management and verification to a third party. Such unified identification methods help in reducing friction but pose new security and privacy threats. Second/third-factor authentication, biometrics, data science, AI and behavioral authen- tication are some of the technologies that are at the forefront of finding new ways to prevent online fraud and credential theft.

If the case for Identity as an Asset is true shouldn’t the control of the identity be with the owner/user?

This is the idea behind the Self Sovereign Identity (SSI) initiative. SSI is the concept that people and businesses can store their own identity data and provide it securely to those who need to validate it, without relying on a central repository of identity data. SSI models are looking at utilizing blockchain as the core technology to achieve their goals.

Any model for consumer authentication and privacy should also include an inclusivity aspect. Inclusivity allows differently-abled people to use the products and services with the same ease as the other users. More and more regulations around the globe are requiring designs that are not only secure but also inclusive, creating the demand for products and services that are developed using Secure Inclusive Design (SID) methodology.

Privacy, security and inclusivity space is going through a major transformation. When there is flux there is an opportunity for innovators to disrupt the market. A number of ideas are converging on the horizon to create a paradigm shift that will pave new ways to manage our digital lives.

Imran can be reached at: ihajimusa@exponent.com or imranb.world@gmail.com

Note: The views expressed in this article are those of the author and do not necessarily reflect the views of the organizationsthatauthormaybeassociatedwith.