With the proportion of daily life conducted online continuing to grow, having a reliable and secure digital identity system has never been more important.
In Australia, work is currently underway on a range of alternatives, all designed to allow individuals to identify themselves when undertaking everything from online shopping to banking and healthcare. While various approaches are being taken, most are focused on having a single, verified digital ID for each person.
Examples include the ConnectID initiative being undertaken by Australian Payments Plus, the Federal Government’s MyGov service, and Digital iD from Australia Post. All are being promoted as seamless, secure methods of confirming identities online.
In the coming months, as the market matures, it is likely that one alternative will emerge as the dominant system and be adopted by the majority of individuals and organisations. This will help to reduce confusion and increase confidence that security can be maintained.
Consumer data rights
At the same time, steps are being taken to clarify how personal data is collected, used, and stored by organisations. The Australian Competition and Consumer Commission has created the Consumer Data Right, which is designed to help consumers safely share data that businesses hold about them.
This initiative essentially puts ownership of personal data in the hands of individuals. They then have a say in who can access that data and for what reasons. Used together with a secure digital ID, it can significantly improve privacy and ensure that data is not used in ways that have not been approved.
The end of the password
Another development that will change the way individuals and businesses operate online is the increasing use of passkeys. These are digital credentials that can authenticate an individual without the need for a password.
In many cases, passkeys can be stored on an individual’s mobile phone with identity being confirmed by either a fingerprint of facial scan. This increases security as both the device and a positive scan are needed before access to a service is granted or a transaction undertaken.
Passkeys are another step in the process of allowing individuals to store and manage their own digital identities. The result will be a reduction in fraud and an increase in confidence when undertaking transactions online.
Another benefit of these developments is that it allows individuals to be much more granular with the personal ID data that they share with organisations. For example, pubs or gaming venues often require people to show their drivers license to prove they are old enough to enter. In many cases a copy is taken and stored by the venue.
However, as well as confirming age, a license also contains other personal details, such as residential address, that is not actually required by the venue.
By instead using a passkey or similar device, the individual could opt to share only their age and not any other details. This reduces the chances of data misuse and increases personal data security.
The implications for Australian businesses
For businesses, these changes to the way personal data and digital identities are used and managed have some significant implications. The days of collecting and storing as much data as possible about customers are coming to an end.
Businesses will only be able to collect the data that they expressly need to complete a transaction or deliver a service. This data will then only be stored for as long as it is required before being deleted.
This shift also has implications for everything from marketing campaigns to loyalty schemes. Permission will need to be obtained from customers before their data is used to personalise campaigns or create individualised offers.
In the months ahead, it will be important for businesses of all sizes to embrace the changes that are occurring the in digital space. Those that are prompt at introducing the required measures to properly deal with digital data and IDs will be best placed to serve customers in an efficient and secure manner in the future.
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