What are Digital IDs and why is holistic Digital ID Management critical for insurance companies and banks?

Digital ID Management really matters! 

Holistic digital ID Management can reduce costs, improve customer experiences, help comply with regulatory requirements and minimize the risk of cyberattacks. It really matters.

The first article of this series about Digital ID Management introduces the different disciplines of Digital ID Management and points out the key advantages insurers and banks can expect when establishing Digital ID Management.

What are Digital IDs?

Digital Identities have become an integral part of everyday life for almost all of us. They are our digital representation in the online environment and can have many forms: from simple usernames and passwords for accessing our favorite food delivery provider to more sophisticated forms such as the digital driver’s license in highly secured digital wallets. The use cases are endless and offer insurance companies and banks many opportunities to accelerate their digital transformation efforts.

What is Digital ID Management?

Digital ID Management focuses on the management of digital identities and devices and is relevant for all sorts of organizations – especially financial services. The discipline can be divided into three main areas:

• Firstly, it is concerned with the identities of the workforce of companies and the related access management processes. This is referred to as Identity and Access Management (IAM). Examples include the access to corporate systems such as HR platforms or SharePoints as well as the management of roles and authorizations.
• Secondly, Privileged Access Management (PAM) is a rising field. It refers to the protection of organizations against cyberthreats by monitoring, detecting, and preventing unauthorized privileged access to critical resources.
• Thirdly, customers, their identities and access rights are in focus. This is referred to as Customer Identity and Access Management (CIAM). Examples include the account for online banking and insurance portals as well as rights to authorize transactions, e.g., bank transfers and payments.

Why is it critical to have a comprehensive Digital ID Management?

Improved compliance and regulations: Insurers and banks underly various regulatory requirements, such as Know Your Customer (KYC) and Anti-Money Laundering (AML), which require the verification of customer identities. Additionally, GDPR-related topics are of high importance. Digital ID Management helps these companies comply with the regulatory requirements.

Optimized customer experience: Digital ID Management enables insurers and banks to optimize customer identification and authentication processes, reducing the need for manual verification and process failures. The result is a frictionless customer experience, leading to higher customer satisfaction and loyalty.

Drastic cost reduction: Digital ID Management can help insurers and banks to reduce operational costs associated with manual identity verification and customer onboarding processes. In addition, it supports by simplifying the IT system landscape itself. Reducing project durations and potentially saving millions of euros in project budgets and run costs.

Enhanced Cyber Security: With a growing number of cyber risks and frauds, Digital ID Management is crucial to secure customer data and financial transactions. By implementing a robust Digital ID Management system, insurers and banks can reduce the risks associated with various forms of cyberattacks.

The next article of this series focuses on the regulatory aspects and the main questions insurers and banks need to address regarding Digital ID Management.

If you would like to exchange your ideas and plans regarding the management of Digital IDs, our experienced professionals offer the expertise to support you in creating measurable and sustainable results.