Digital Identity Network
Convenience, privacy and security have always been somewhat at odds with each other. The more convenient something is, the less secure it tends to be. The more secure something is, the less privacy it affords. It is an unfortunate fact of life that increased security almost always entails a decrease in privacy and convenience. This can create tremendous difficulties for businesses and services. On the one hand, they are tasked with keeping everything from personal information to finances secure, yet the very consumers whose information or finances they are protecting are often the biggest obstacle to securing that information.
No matter how many warnings they are given, consumers continue to try and protect their accounts with ridiculously simple passwords like "password" and "123456". They also write passwords down in conspicuous places, share them freely or use the same login ID across numerous accounts. In some cases, they may use the same login credentials for free sites as they do for sites containing highly sensitive information such as banks or brokerage accounts. This makes it easy for hackers to break into sites with minimal security and download thousands of plain text login credentials that they can often use with great success on much more secure sites.
Unfortunately, consumers who fail to secure their accounts are often not the ones left holding the bag. Compromised accounts cost businesses billions in lost revenues every year not to mention public trust. The battle to protect consumer information when consumers themselves refuse to secure their own accounts has given rise to the need for security protocols like multi-factor authentication and a digital identity network.
What is a Digital Identity Network?
A digital identity network is a collection of information about the online habits and patterns of every user on the internet. Needless to say, most users access the internet through a wide variety of means, which can also tracked by the digital identity network. So, for instance, when a mobile user logs onto their account using a specific device one time and from a web browser with a different IP address another time, those two pieces of information are then linked together to help consistently verify and authenticate that user.
How Does a Digital Identity Network Help Create Better Security?
For the most part, people are creatures of habit. While there are certainly cases where having a consistent daily routine can make you more vulnerable, it also creates greater personal safety and security. For instance, if you have a habit of arriving punctually at the office at 9:00 am every morning and one day you are late, chances are good people will start looking for you. If you come in some days but not others and no one knows when you might or might not come in, it could be days before anyone starts getting concerned.
If you rarely spend more than a few hundred dollars on any purchase and then suddenly an authorization comes through for a single purchase of several thousand dollars, it can raise a digital red flag. An AI-powered system that monitors all credit card activity can initially decline the purchase pending further verification. If one user consistently logs in from a specific device or location, then suddenly logs in from a completely different device and location, then the system can deny access pending further verification.
Digital identity networks still help protect the privacy of users while increasing security at the same time. A user's digital identity may never be tied to their real-world identity, but their online habits and patterns still create a very unique and specific "fingerprint" that can raise red flags when there is any variation.
Digital Identity Networks May Help Prevent Billions in Losses Due to Fraud
Digital identity networks help to prevent fraudulent activity in real-time rather than discovering them after the fact. For instance, without active fraud monitoring, a cardholder may not discover for a month or more that an unauthorized purchase of several thousand dollars was made to their account. At that point in time, either the bank, credit card company or merchant can end up holding the bag for the charge, which will invariably be passed back to consumers in the form of higher prices, interest rates or fees.
Active fraud monitoring based on a digital identity network can stop the authorization before the purchase is ever made. Digital identity networks can stop unauthorized logins before they are given access and even help target the location of cybercriminals in real-time. For instance, if an unauthorized user attempts to gain access to an account or accounts several times from a specific IP address, geolocation services can help pinpoint their specific location and send the information to local authorities. This may actually help authorities literally catch cybercriminals in the act, something that has been nearly impossible to do in the past.
The iovation fraud prevention community is dedicated to identifying and stopping cybercriminals before they impact your business.
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