“Digital Identity Management Is Gaining In Importance”

Digital identity management is becoming increasingly important, especially for financial service providers.

Digitization brings more and more logins, authentication, and identification processes with it. Digital identities are therefore becoming an important factor. This also has an impact on banks and other financial service providers, as digital identification in the banking environment is sometimes a technical and organizational effort. In-house identity and access management systems (IAM systems) primarily mean increased costs for the management of isolated solutions for many banking and financial service providers. In the course of technical and regulatory innovations, additional individual components are always added.

In this context, new identity marketplaces are increasingly emerging. Your goal is to move away from isolated solutions and to understand identity management as a whole. These solutions focus on greater transparency and compatibility as well as standardization of interfaces. In the end, this also benefits the customer, who then only has to register for several services via uniform access.

Central identity management is becoming more and more important

Identity management already plays a significant role in the initiation of services in less regulated industries. With a view to increasingly stringent regulatory requirements, for example, to prevent tracking measures, central identity management is becoming more important.

Most digital customer journeys usually begin with registering for a service and then logging in. This is the key to building a customer relationship later. From the moment you log in, the bank can determine who the prospect is, what their preferred payment methods, and product preferences are.

In general, we have observed that the initiation of digital customer relationships in recent years has been shaped primarily by digital payment solutions. The next step in this process will be identity management.

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Standards and interfaces for efficient identity management

The value chain in the field of digital identities is getting longer with the regulatory requirements for the financial sector. Banks and other financial service providers are faced with particular challenges in coping with the requirements of AMLA, MaRisk, outsourcing guidelines, etc. while still offering customer trips as comfortable as possible. In connection with legacy systems, it often requires the connection of many individual solution components and thus increases organizational and procedural complexity – combined with rising costs.

Cooperation with providers who offer modular solution components from a single source reduces the integration and operating costs and makes it easier to focus on your own product and service offering. On the basis of flexible interfaces and the corresponding industry standards, banks can more easily integrate into other digital ecosystems than before.

Customers don’t choose their bank for the perfect onboarding

Clear visual feedback, real-time validation of entries, a progressive profile instead of overloaded forms, and intelligent networking with technological possibilities by identity management providers such as device-specific authentication are essential for the user.

In the banking market, customer friendliness has been the focus of onboarding in recent years. From a technical point of view, fast onboarding has been possible for a long time. The next step is to further improve this interface in order to implement new procedures based on the combination of national and international jurisprudence.

When integrating innovative, user-friendly processes, in the medium term it will primarily be about topics such as increasing efficiency, not so much about growth. After all, customers don’t choose their bank for the perfect onboarding, but for information that is as personal as possible. Therefore, the product has to be tailor-made in order not to lose any interested parties again.

Also Read: Trends That Will Impact Data Management In 2021

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