The digital economy has presented us with extraordinary change. From ecommerce transactions and online banking to car tax renewal and school place applications, our shift to digital has had a major impact on our daily lives. These connections and transactions are reliant on one critical element: trust. Trust is a crucial part of an organisation's relationship with its audiences. We don't expect to have to prove our identity whenever we order a product or complete an online form - the organisation trusts that we are who we say we are.
The issue arises when people exploit that trust. Fraud and identity thefts are on the rise. Organisations and their customers and citizens are placed at risk. In order to really make the most of our digital world, we need businesses to go beyond trust - we need them to help us protect our identities. We need them to have robust measures in place to determine and protect our identities in a precise and accurate way. And we need them to go deeper than password, encryption and surface-level security checks.
The increasing epidemic of identity theft
Most online transactions require some checks and safeguards, but these vary from website to website, and some are not sufficient to protect against crime. Evidence of this lies in the fact that the number of reported cases of identity theft is rising dramatically. In the UK alone, cases of identity theft have more than doubled in the past year according to fraud prevention service Cifas*1. Cifas' research found more than 148,000 victims in the UK in 2015 compared with 94,500 in 2014, with more than 85% of the frauds carried out online. France tops the table in Europe for credit card theft *2, and in the US, around 12 million residents per year are said to have had their identities fraudulently used *3.
Never has it been more important for us to verify and safeguard our identities, and for organisations to take measures to protect us. As consumers, we need to be prudent and cautious when we share our personal details, whether in a physical or digital environment. But we don't expect to have to prove ourselves. The onus should fall not on us as consumers to prove that we are who we say we are: instead, it should fall on the organisation we are connecting with - the local authority, bank or shop.
To date, this hasn't always worked. Banks are being hit with record fines for not undertaking due diligence, carrying out appropriate background checks or flagging politically exposed persons, leaving themselves and their consumers vulnerable. And ecommerce firms are falling victim to fraud, as despite transactions for online shopping having standard checks in place, we can still order a parcel using someone else's credit card, or have an item delivered to a different address. Identities can be acquired for as little as £15 through certain websites.
We're still not fully benefitting from the digital age
Until organisations have the correct software and measures in place to make these checks and understand the connections between entities, we, as consumers, will not benefit from the real freedom the digital world presents. There are still restricted areas, and things we can't do online. One of these restricted areas is voting. Writing an X on a piece of paper and posting it in a ballot box feels like going back to a bygone era - it isn't reflective of our digital age. We can move money around online, buy goods and experiences online, we can get access to our personal medical records digitally. But we can't yet vote electronically.
Digital voting is said to be a threat to the integrity of a democracy, too high a security risk with privacy and transparency issues. Ironically, though, the current physical process is wide open to risk; for example voters in the UK - including during the recent UK EU Referendum - are able to turn up and vote without their polling cards and without and form of proof of ID; and the traditional reliance on the local community to staff the polling station often for long hours without a break, leaves their support work prone to human error - ticking off names on a printed list once they have handed out a ballot paper.
What are organisations doing to help?
Public and private organisations are working hard to enable us to do more online, whilst rolling out measures to protect our identities. In UK government, for example, GOV.UK Verify has been created. Users can select the organisation they want to make their personal background checks, and once approved can check tax, benefits and driving licence information. We can now use a valid UK passport to renew a driving licence online, using Government Gateway ID. And some government agencies are using digital photograph recognition to make identity checks. HM Passport Office has been trialling a new online service where customers who are renewing their passport can upload their digital photo which is immediately checked for International Civil Aviation Organisation compliance.
Private sector organisations continue to look at alternative verifications to minimise risks of identity fraud. Retailers such as Timpson are making some fascinating advances in this space, opening ArkHive stores offering identity-related services such as guaranteed ID photos, instant document and photo printing/scanning and VIP application services. Financial institutions are using software to help them manage risk and generate a clear, detailed picture of its clients - and their clients. The software draws together disparate data sets, linked records, accounts and relationships to generate a Single Customer View. Creating this view enables financial institutions to identify and eliminate threats presented by companies set up as 'fronts' for money laundering and other illegal activities, or from at-risk individuals or Politically Exposed Persons.
These innovative ways of identity management - at a personal and customer level - play a crucial part in driving us to do more and more online. And in the future, they will be pivotal in enabling us to make the most of the amazing opportunities our digital society presents.
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