Digital Identity Management: Why It's Essential for Business

Nearly every company engages in digital business transactions. Customers want to connect with you online, and employees want to collaborate remotely. Simultaneously, the internet is an anonymous digital world. You can’t always easily verify the person at the other keyboard.

However, there are solutions that can help ensure that people are who they say they are online. Digital identities are complex collections of unique information that allow you to build trust with an online user. As an employer, they help you verify employees’ and contractors’ identities. As a business, they give you a way to protect customer information and mitigate fraud risk. 

With so many internal and external users, digital identity management is essential for businesses so that they can verify everyone and document their activities.

What is digital identity management?

Digital identity management is a set of processes and technologies that allow people to securely share their personal information with companies or other people. 

The data you collect to create a digital identity includes personally identifiable information (PII), like:

• email addresses 
• phone numbers 
• usernames 
• passwords 
• credit card details 
• bank account numbers
• medical records

A digital identity manager allows you to control access to PII. For example, you can set different levels of access based on what role people play within your organization. Your HR department collects sensitive employee data, but the rest of your company shouldn’t be able to see that information. Your marketing team may collect digital identity information to personalize customer experiences, but the HR department doesn’t need to know that information. 

Why is digital identity management critical?

Digital identity management protects your organization and your customers. With digital identity management, you create a central location that manages all customer, employee, and contractor identity information. 

Digital identity management is important for several reasons, including:

• Fraud risk mitigation: Knowing your customers means you can prevent someone else from using their identity
• Protecting customer information: Knowing who’s accessing resources mitigates data breach risks
• Meeting compliance requirements: Setting resource access controls helps prevent accidental information sharing that could lead to a privacy violation

What is identity and access management (IAM)?

Identity and access management (IAM) is the set of policies and technologies that control users’ access to resources such as databases, networks, applications, and devices. IAM solutions are typically implemented within an organization’s network infrastructure, establishing centralized controls over user identities and permissions. Your IAM solution enables you to manage user accounts, passwords, privileges, roles, groups, entitlements, and policies across multiple systems and platforms.

Benefits of implementing digital identity management

When businesses implement digital identity management, they gain financial and operational benefits. 

Enhancing employees' user experience

From onboarding to completing daily tasks, digital identity management streamlines the employee user experience. Digital identity management allows you to electronically collect employee documentation like contracts and forms. It also ensures that employees have the resource access they need to complete their job functions.

Higher levels of accuracy

Since a digital identity consists of multiple data points, you can create a more accurate picture of the user to verify them. For example, you can correlate information like username, password, geographic location, and device for a more accurate picture of the person accessing the account. 

Improve customer experience

Digital identity management enables the convenience and enhanced privacy that customers want when interacting with your business online. For example, they can create online accounts that allow them to make payments and complete transactions without having to provide sensitive information over email or phone.

Reduces cost and increases efficiency

Organizations can save money by reducing paper usage and streamlining processes. Additionally, since internal and external users can have online experiences, you gain improved visibility into processes that enhance efficiency and reduce costs. These include remote work options and allowing customers to make online purchases.

How to implement a digital identity management system

Scaling your business means providing digital transactions to customers and employees. You should implement a digital identity management system to protect your organization and build customer trust. There are four steps that we recommend when implementing a digital identity management system:

1. Audit of your current landscape

Before selecting a solution, you must review your current identity verification processes and documentation. Some considerations include:

• Types of digital experiences you want to provide
• Digital data you currently collect
• Paper documentation you may want to digitize
• Regulations that impact your industry

2. Pick the right solution that fits the company

No two companies are the same. You need to choose a solution that works for your unique needs. Some questions to ask when making a decision include:

• Are we only using this for employees and contractors?
• Will we provide an online experience to customers in the future?
• How easy is this tool for an end-user?
• Does this tool give us the control over access we need?
• Does it provide the documentation we need to prove compliance?

3. Define a strategy before implementing

Once you choose a solution, you must plan your strategy. Since a digital identity consists of various data points, you need to determine how you will deploy the tool and implement processes. 

Some considerations include:

• Integrations with different applications across the company
• Storing data securely
• Reducing multiple login IDs
• Setting access controls as precisely as possible
• How to roll out the solution to employees and customers

4. Continue to fine-tune the solution

The longer you use your digital identity management solution, the more data you can collect. For example, if you connect a user ID to a device, you might find that the person uses multiple devices, including a laptop, tablet, and smartphone. The more data you collect, the more accurate the solution becomes. You should monitor the outcomes and iterate processes to enhance return on investment over time. 

How Notarize can help businesses verify digital identities and signatures

Building a digital identity means collecting as much information as possible. It’s like creating a digital fingerprint for your users. 

‍Notarize’s online notarization platform enables you to get third-party identity verification to more accurately connect a physical person to their online identity. With Notarize, your customers can use any device they have and get a document notarized at their convenience — from anywhere, anytime. By incorporating Notarize into your digital identity management plans, you can offer enhanced security without making customers do more work. Learn more about how online notarization can help verify identities and signatures for important documents.