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In the digital era, customer identity is key

Identity is vital for presenting a consistent customer relationship across digital channels, but not everyone in all organisations understands this shift, according to identity veteran Ian Glazer

Identity is key to providing the context for business processes when enterprises engage with customers and partners through digital channels, according to an identity industry veteran.

“Identity is also important for recognising customers, acknowledging the relationship with them, and making that consistent across all channels,” said Ian Glazer, editor of the Kantara Initiative identity relationship management working group.

“Although not a new discipline, it is getting increased attention as organisations begin digital transformation programmes because having that context and being able to present a consistent relationship [across digital channels] is crucial to successful engagement,” he told Computer Weekly.

This is more important in the digital era than previously, but not everyone in all organisations understands this shift, said Glazer.

Typically, the first groups in a business to understand the importance of identity to customer engagement are those involved in looking after an organisation’s brand, those involved in marketing, and those involved in supply chain optimisation.

“However, over the past five years – with an accelerating pace in the past two – these groups are starting to recognise that they do not have all the pieces of the puzzle under their control,” he said. “At the same time, people are feeling a real competitive pressure on their digital channels from the rest of the market.

“The combination of the two is driving the need throughout organisations to become part of the digital transformation process, as well as customer identity, to at least keep up with competitors or even pull ahead by providing a superior customer experience.”

There are three main ways that customer identity adds value, said Glazer. One is reducing friction in the sign-up process.

“The more hoops that a prospective customer has to jump through, the more they have to fill, the more data they have to provide, the greater the likelihood that they are going to go somewhere else, or in the public sector scenario, the more likely it is that customer satisfaction will go down.”

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Second, customer identity can help to optimise the sign-in process by giving customers control over how they identify themselves to the organisation, such as using a bank ID, a government-issued ID, a social media ID, or simply a username and password.

“Giving customers that choice and giving them a seamless experience through single sign-on provides a much better overall customer experience,” said Glazer.

Third, customer identity provides what Glazer calls “grist for the business process mill” by giving the necessary context to an organisation’s business processes and customer apps so the onward customer journey can be consistent, personal and relevant.

Glazer will discuss optimising digital customer engagement with identity at the KuppingerCole Consumer Identity Summit in Paris on 22 and 23 November 2016.

“Most companies that I deal with are looking at building a single picture of who a customer is and to rally the business around that customer, but typically they face similar sets of challenges, such as siloed infrastructure and fragmented business processes,” he said.

“They are also failing to evaluate and consider the key areas of sign-up, sign-on and the onward journey and are consequently failing to identify weaknesses in their customer engagement processes and failing to optimise what they are doing in terms of digital engagement.”

GDPR requirements

In the light of increased privacy requirements set by the new European General Data Protection Regulation (GDPR), Glazer recommends a principle-based approach to gathering customer data.

“We demonstrate respect for the customer by providing them with controls over the information that we gather, over how that information is used, and controls over how they log in to the services we might provide as an enterprise,” he said.

“So if you ground everything you do in that principle of giving customers the controls they need, then whether we are talking about GDPR or other regulations, accommodating those becomes a natural part of operating the service.”

Having a principle-driven programme means that fair information practices, such as data minimisation and clarity about the purpose of data collection and use, become part of standard practice, said Glazer. “Therefore, people who are doing this well will automatically be compliant with the GDPR, and nothing new will be required.”

Apart from the sanctions for non-compliance with regulations such as the GDPR, Glazer said the importance of getting the privacy aspects right is underlined by the fact that competitors nowadays are just a click away.

If an organisation is not paying attention to consumer identity to offer good privacy practices and good customer experiences because of cost concerns, customers will simply click elsewhere to get the goods or services they want, he said.

Identity and access management (IAM) in the enterprise has traditionally been a cost centre, but customer identity is a growth opportunity, regardless of which sector or which part of the world the enterprise is in because investing in customer identity is actually laying the path to generating revenue and growth, which is demonstrable in terms of increased engagement and in the number of people using my service,” said Glazer.

“Customer identity is not a cost centre, but a centre of generating revenue and growth. So it is, in fact, a profit centre for the organisation, and not doing it means leaving money on the table.”

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