While identify fraud and theft have long been hot topics in the financial services area, the challenge of authenticating identity in an increasingly digital world is not limited to this industry alone. New research from TowerGroup finds that a number of factors are driving both private and public enterprises to seek solutions for digital identity management.
These factors include the explosion of business-to-business (B2B) commerce; the push to automate inefficient, paper-based processes; the growth in Internet fraud and data theft; and the overarching drivers of regulation and globalization. Demand for identity management among corporations, institutions and government enterprises is also fueled by these organizations’ increased reliance on electronic means of communicating with employees, trading partners, and other third parties.
The extension of e-commerce into the B2B and business-to-government contexts is essential to helping organizations streamline, automate, integrate and, ultimately, gain competitive advantage. Yet with business losses from computer-related crime on the rise, the future health of the global economy will increasingly depend on the ability of corporations, banks, and government agencies to conduct business electronically in a safe environment.
TowerGroup believes that banks posses unique qualifications that support their ability to provide high assurance identity management solutions. Banks are well-versed in highly-regulated processes for authenticating customers, are established in their traditional role as trusted services provider, and have the ability to provide assurance to third parties that a client is legitimate and can be counted on to meet its obligations. Other types of organizations that might provide identity management services on a large scale – such as technology firms, telecommunications companies, or government agencies – lack one or more of the critical criteria of experience, trust, willingness to manage risk, and a large base of already authenticated relationships.
The new report titled “The Business of Identity Management: Leveraging Core Competencies to Create Value for Client,” by Susan Feinberg, research director of the TowerGroup Wholesale Banking practice, analyzes how the evolving business needs of corporate and institutional clients are driving the growth of identity management services.