Digital identities for digital businesses

A digital-first world

With customers around the globe, my job often takes me to new locations. Last month, I was traveling from London to Berlin for business armed with my typically reliable devices, including a brand new tablet. I needed to access my bank account to transfer some funds to my daughter and pay important monthly bills. No such luck, however, as the one-time SMS for authentication did not go through on my new tablet and I was not able to request another one. My laptop was out of battery at the moment and my phone was getting poor service. I ended up having to wait another three hours until I landed at my next destination and arrived at my hotel, and the inability to access my money when I wanted to was extremely frustrating – even more so because it doesn’t have to be this way.

As businesses across industries embrace a ‘digital-first’ approach, they are faced with a constant threat of attacks, whether from well-organized crime rings, regular hackers and fraudsters or simply unsuspecting good customers and employees who become victims of cybercriminals.

Cybercrime has grown in frequency, severity and complexity, as seen in the recent data from ThreatMetrix, which shows that attacks targeting financial institutions increased 30% in the last quarter. So, I can understand the precautions taken by my bank. With each data breach and cyberattack, online businesses are targeted with a growing pool of stolen credentials. Consumers’ identities can be pieced together with leaked pieces of information, augmented by data for sale on the dark Web, and used to commit online fraud.

In this climate, traditional identity-proofing methods are fast becoming ineffective, and businesses need to rethink identity and look at their traffic holistically and in real time. Most importantly, businesses need to ensure that the protections put in place do not create barriers to doing business.

Digital identity: a business imperative

In a post-breached world, additional online security steps are often put in place by companies looking to cut down on fraud while having the adverse effect of driving away customers who are asked to jump through hoops to prove their identities, as I was at the airport and have been many times before in other circumstances. This is an outdated approach, and technology now exists to authenticate users based on their digital identities, without adding friction.

Every time a consumer makes an online transaction, a digital footprint is left behind. This is spread across multiple devices, locations, addresses and payment methods; and across their personal and business activity. In contrast, the footprint of a fraudster is often markedly different to a genuine customer, as they go to great efforts to mask their devices, location and true identity.

Organizations looking to operate successfully online in a world of digital debris must piece together all the hundreds of identifiers connected to a user to gain insight into their users’ digital identities. Along with cutting-edge behavioral analytics, this builds an incredibly accurate portrait of a consumer’s identity.

Removing friction from authentication accelerates conversion rates for e-commerce by up to 4%, drives up satisfaction levels for online banking and maximizes revenue. As an added bonus, understanding consumers’ digital identities not only drives down fraud losses by up to 90% but lowers operational costs related to fraud up to 50% by decreasing reliance on costly step-up authentication and manual reviews.

Global shared intelligence

At ThreatMetrix, we are committed to helping digital businesses bring together all aspects of a consumer’s online devices and behavior into one unique, anonymized digital identity. What enables us to do this is the world’s largest Digital Identity Network, built on the shared intelligence from more than a billion transactions per month. The network correlates seemingly disconnected security incidents in real time to establish a user’s true digital identity, which is continuously evaluated in the context of each and every interaction. I hope, in the future, institutions like my bank would see the benefit of making the customer experience seamless by reevaluating how they authenticate a customer’s digital persona.

No matter how detailed a fraudster’s faked digital identity may be, it can never compete with the scale and depth of a global network based on the millions of daily transactions across the globe. This can provide organizations with the confidence and security they need to consistently identify fraudsters from trusted users, protecting brand reputation, lifetime value and long-term revenue.

About Reed Taussig

Reed Taussig is president and CEO at ThreatMetrix, The Digital Identity Company, the market-leading cloud solution for authenticating digital personas and transactions on the Internet. Reed leads ThreatMetrix with more than 30 years of experience in executive management at high-growth Silicon Valley companies. As founding CEO of Callidus Software, he led the company from a five-person startup to a successful IPO with USD 70 million in revenue and 350 employees. He has also held CEO positions at Vormetric and Inquiry.com, along with Board of Advisory roles at Xactly and Mitratech Corporation.

About ThreatMetrix

ThreatMetrix, a digital identity company, is the market-leading cloud solution for authenticating digital personas and transactions on the Internet. Verifying more than 15 billion annual transactions supporting 15,000 websites and 4,000 customers globally through the ThreatMetrix Digital Identity Network, ThreatMetrix secures businesses and end users against account takeover, payment fraud and fraudulent account registrations resulting from malware and data breaches. Key benefits include an improved customer experience, reduced friction, revenue gain, and lower fraud and operational costs. The ThreatMetrix solution is deployed across a variety of industries, including financial services, e-commerce, payments and lending, media, government and insurance.