Why Advanced Identity Strategies Are Needed to Futureproof Customer Experience

In today’s fast-paced, always-on retail environment, what does the perfect shopping experience look like?

Maybe it’s something as simple and prosaic as buying a Coke from the local corner shop.

The customer grabs the cold drink, pays with cash, a card or a swipe of their iPhone, and continues on their way. The transaction is quick, convenient and nearly effortless: there’s no friction to interrupt the customer journey.

This buying experience is also private and secure.

Though fraud protections are in place, the customer’s bank doesn’t know what was purchased. The iPhone is acting as a point of sale (POS) device, but it’s not collecting data to track its user’s beverage preferences. And the Coca-Cola Company has no idea who bought the canned drink.

It’s no accident that we’ve chosen an offline customer experience as an exemplary paradigm of rapid delivery, low friction, convenience, privacy and security.

Building identity management systems that successfully deliver frictionless access and privacy and security online still isn’t an easy task. This means that becoming able to provide digital customer experiences that are as simple and convenient as buying a can of Coke will require fresh thinking, new strategies and the right technology investments.

Watch Lead Analyst at KuppingerCole Paul Fisher’s full session at Forum22 to discover more about how industry leaders are thinking about the future of customer experience.

Meet Rising Consumer Expectations

Nowadays, customers are looking for convenience, rapid service and a broad array of choices when they purchase goods and services online. But they’re also increasingly data-savvy and privacy-aware. 

The General Data Protection Regulation (GDPR) has helped elevate this privacy-awareness. Now citizens are far less likely to accept giant corporations using and abusing their data, particularly without informed consent. 

For the most part, today’s businesses want the same things as their customers. 

They’re striving to rapidly deliver friction-free experiences while offering the convenience, privacy and security that consumers expect. However, they’re also interested in collecting data that they can leverage to make their products and services better, their operations more sustainable, and their delivery more efficient. 

There’s nothing inherently wrong with using data to improve business models or operations, but collecting that data in ways that still respect people’s privacy—and protect their information’s security—poses additional challenges. 

Identity and access management tools and workflows stand squarely at the centre of this dilemma. Identity teams are expected to create systems that will deliver seamless, frictionless access along with the privacy and security that consumers have come to expect. Given the current state of the technology, though, that’s still a big ask.

Future-Focused Identity Strategies

When today’s consumers interact with applications and services online, they do so—for the most part—via customer journeys that remain primarily technology-driven. 

These journeys typically involve multiple authenticators, identity providers and systems of record. Browsers might be able to autofill username/password combinations, or previously-visited sites might be able personalise their login experience through the use of third-party tracking data. 

But these experiences are not nearly as straightforward, easy or private as the process of buying a Coke in a local shop is.

Major progress has been made, but tomorrow's customers will always be demanding more when it comes to convenience, data protection, and data security. 

One innovation that’s been proposed is Digital Identity. In this model, rather than relying on username/password combinations or other details, Identity providers would collect identifying information about individual users based on their behaviour elsewhere online. 

For instance, a Digital Identity provider might consider someone’s online shopping habits, their typical activities on Facebook, or their search patterns on Google to build a unique identifying profile for that individual. This digital identity passport would have the benefits of being multidimensional and reusable across different sites. 

However, there’s a major flaw within this concept: the consumer isn’t in control of their own data.

They haven’t explicitly given permission to the provider building the identity profile to compile data about their online behaviour and create a digital footprint from it. It’s unlikely that the public—particularly in Europe, where awareness about digital privacy’s importance is high—will agree to have their information used in this way.

Another model that’s gaining traction within the industry is offering Identity Components as a Service (ICaaS). 

A growing number of startups and established vendors are taking the idea of decentralised identity management and offering developer-friendly components that can give organisations much more granular control over how they’re managing their customers’ identities, how they’re granted access, and what the user experience is like. 

With this decentralised, segmented, API-driven approach, it’s possible to create best-practice user experiences and frictionless access mechanisms like one-time passwords (OTP) without compromising on security.

We can take this a step further by combining the most advantageous aspects of ICaaS with the most promising parts of digital identity. 

This combination yields a new model, one that analyst firm KuppingerCole calls the Identity Fabric. 

An identity fabric is a scalable, independent identity architecture that takes the form of an identity mesh surrounding the entire organisation — instead of having a central identity platform in the middle of it. This fabric is cloud-native, making it easier to scale, modify and upgrade. It’s interoperable, so it’ll work with the various standards that are in use across the identity industry, making it possible for different departments or lines of business to leverage different standards. And it’s agile and extensible, so businesses can modify edge identity gateways as they see fit to meet their unique needs.

Another model is that of the digital identity pod. 

What if we took the idea of decentralised digital identity and enabled end users to opt into sharing their digital identifiers with the organisations that they’d chosen to trust? For some consumers, it might be Amazon, for others their preferred airline or their local bank. This group of trusted organisations could create a digital passport that they could share, or perhaps encrypt and leverage to create a certificate in a broader range of use cases. 

The idea of sovereign (or self-sovereign) identity —in which the consumer is in charge of their own identity—is likely to grow in popularity and importance in the coming years. Realising it in practice will be challenging, but by harnessing the development and innovation skills of industry leaders like Auth0 and remembering that technology is here to meet the customer’s needs, it’s certainly possible.

Levelling Up Digital Customer Experience

The maturation of decentralised identity and SSI over the next few years looks set to revolutionise how organisations build digital experiences for their customers.

If your business is striving to create truly frictionless buying journeys, then it’s critical that you prioritise that goal in your decision making. Start by planning out the experiences you want to provide your customers and then build your tech strategy around that - not the other way around. 

By constructing your architecture to facilitate secure identity flows, frictionless access, and prioritise good data-keeping, you are putting your customer’s expectations first and preparing your business to deliver next-generation digital experiences. 

Want to learn more about how Okta is making tomorrow’s customer authentication and frictionless login experiences possible today? Read our whitepaper: “How to create the identity experience your customers want” to reveal:

• How current Customer Identity strategies fail to meet customer demands
• What modern consumers expect from future identity experiences
• How Customer Identity minimises consumer frustrations and improves security

Download the asset here.

Watch Lead Analyst at KuppingerCole Paul Fisher’s full keynote at Forum22 to discover more about how industry leaders are thinking about the future of customer experience.