Whether we’re thinking about the redundant forms used to collect usernames, passwords, and personal information, the endless passwords to keep up with, or the data breaches and identity theft to deal with, the role of digital identity in the customer experience currently leaves a lot to be desired. New technologies being developed for digital identity, collectively referred to as self-sovereign identity (SSI), hold the promise to eliminate the need for all of those usernames and passwords and provide customers with unprecedented control over their digital identities and personal data.
Read on to learn how SSI elevates the customer experience by improving customer onboarding and authentication while reducing fraud and identity theft.
1. Removes Friction From Onboarding
Most consumers have gotten used to the idea of sharing personal information to access social networking sites or receive discounts from loyalty programs, but the data collection process still represents a point of friction that businesses struggle with. Reducing the number of forms necessary to complete a task has long been a best practice for improving conversion rates in the world of marketing, but reducing the collection of extra information only goes so far in eliminating the amount of time involved in onboarding procedures. Industries like healthcare, finance, and real estate that involve maintaining large amounts of data still need to be able to gather information from new customers efficiently while minimizing the frictions that result in unhappy customers and lost profits.
SSI streamlines onboarding by eliminating the need to fill out redundant forms. Once a person’s data has been recorded using the protocol for decentralized identifiers (DIDs), they will be able to use that credential to make that information available to whomever they want and revoke access to the same credential as easily as clicking a button. A recent report from McKinsey Global Institute explains that:
“Institutions using high-assurance ID for registration could see up to 90 percent cost reduction in customer onboarding, with the time taken for these interactions reduced from days or weeks to minutes. By enabling streamlined authentication to improve the customer experience in digital channels, institutions could also influence customers to choose digital offerings that are cheaper to provide. For example, for financial services providers, the cost of offering customers digital accounts can be 80 to 90 percent lower than the cost of using physical branches.”
Integrating products and services that use SSI into onboarding procedures eliminates a majority of the time involved in exchanging information, and the ability to offer a superior customer experience provides businesses with the leverage they need to steer customers toward the better option.
2. Reduces Complication From Authentication
Once a customer has been onboarded, they still need convenient ways to access the applications or web portals provided for their benefit. Authenticating users has become a burdensome process full of obstacles that discourage users from engaging with a business. Having to create a new username and password for every account a person causes those without password managers to question the value of creating another account to keep up with, and those who do use password managers have to endure tedious procedures to ensure the security of their accounts or simply risk their passwords for the sake of accessibility.
Password managers and spam prevention tools like Captcha have been used to patch the cracks. Unfortunately, managing dozens, if not hundreds, of passwords and taking the time to click the right pictures or type the right letters to satisfy Captcha results in wasted productivity and actually encourages data breaches and identity theft when users privilege accessibility over security. Data breaches in the United States alone have roughly tripled over the past decade. Bloated authentication protocols have led to losses in other areas as well. Guest checkout tends to be viewed as a compromise made by retailers engaged in e-commerce to reduce cart abandonment by sacrificing data collection, but it won’t make much sense to distinguish between guest and normal checkout once the implementation of SSI reduces the need for lengthy authentication processes.
With SSI, users will be able to validate their identity with their own credentials rather than creating a new username and password for every new account. Additionally, it eliminates the need to share sensitive personal information, like credit cards or phone numbers, with complete control over what pieces of information get shared and without having to fill out redundant forms. Integrating SSI into authentication procedures allows businesses to provide access to their digital offerings with greater ease than ever before.
3. Eliminates Fraud and Identity Theft
Compromises in current protocols for digital identity have contributed to the sharp increase in the number of data breaches we’ve seen over the last ten to fifteen years, allowing hackers to exploit lax security measures taken in the name of accessibility and adding significant overhead costs that inevitably get passed on to consumers.
The McKinsey report referenced earlier notes that, “in 2017, $16.8 billion was lost in the United States due to identity fraud, and since 2013, more than 6.2 billion customer data records have been breached in the United States alone.” The document also cites $1.6 trillion in potential savings from reduced payroll fraud.
Businesses responsible for customer data need to be responsive to incidents of fraud and identity theft. SSI can’t eliminate the need for businesses to maintain customer data, but it can help mitigate the liability of managing that data by making it easier to share information quickly without compromising on security. Enabling users to manage their own credentials means they’ll be able to revoke access to credentials after they’ve been shared and destroy them without spending hours on the phone with financial institutions. Instead of requiring tradeoffs between accessibility and security, SSI tackles the question of how we can minimize obstacles to accessibility while maximizing the security of the protocol.
It will take time for businesses to develop best practices for integrating SSI into onboarding and authentication procedures, just as it will take time and education for customers to get used to the idea of managing their own credentials. Those that lead the way, however, will gain a serious first-mover advantage.
Businesses need to be able to efficiently onboard new customers and provide credentials for authentication that secure sensitive data while limiting the friction experienced by users. The deployment of products and services using SSI promises to help businesses provide a better customer experience by significantly reducing the cost and time involved in customer onboarding and authentication as well as the amount of fraud and identity theft allowed by current technologies.
Interested in using SSI for your business? Check out Evernym’s quick-start plans to take advantage of the fastest way to get started with decentralized identity solutions.