Digital identity is your online persona, including your name, mailing address, purchase history, and social media profiles. It establishes who you are online and protects your privacy at the same time.  

 
 

Having a strong digital identity is critical not just for individuals but even for organizations, as cybercriminals can use it to access services like email, banking, and social media and thus cause serious harm. That's why 80% of organizations worldwide have increased their focus on digital identity authentication over the last couple of years. 

 
 

While it is impossible to stop cyber criminals from planning an attack, you can always outmaneuver and stop them with the right authentication procedures. If organizations or individuals do not authenticate digital identities, they may run the risk of breach.  

 
 

People and devices should only be authorized to access what they have permission to, and you can achieve this by digitally authenticating people, applications, devices, and data with different authentication methods. 

 
 

On that note, here are a few reasons that manifest the importance of authenticating digital identities: 

  1. Robust Security 

 
 

To create an account online, you require credentials, such as a user ID and password, to access your account. This is called SFA or single-factor authentication and is among the simplest ways of authenticating digital identities.  

 
 

2FA or two-factor authentication needs a password, the first factor, and a numerical code, biometric or security token, the second factor, to access data online. Also called dual-factor authentication or two-step verification, 2FA authentication both sets of a user's credentials before offering access to any online account. 

 
 

MFA or multi-factor authentication is electronic authentication where users need two or more factors, like voice recognition, ID, and password, to access an application or site. Since multiple layers of authentication are involved, it keeps the access control systems secure even if any of the authentication factors are compromised.  

 
 

Multi-factor authentication combines two to five factors: possession, knowledge, location, time, and inheritance. Here possession factor is something that a user possesses; knowledge factors are things that the users know, like PIN or password, and inheritance factors, also called biometric factors, include voice tone, facial features, and fingerprints. 

 
 

Adding several authentication layers to an organization's network or individual's digital identity through MFA can improve overall security. It is the most dependable way to authenticate users preventing unauthorized access while helping organizations comply with industry regulations. 

 
 

 

 

  1. Mitigates the Risk of Digital Identity Theft 

 
 

Any digital identity, whether third-party vendor, employee, IT admin, or consumer, has several privileges that, if compromised, can cause losses worth millions for a company. Adding several layers of security through solid authorization and authentication can mitigate the risk of identity theft.  

  1. Helps Avoid Digital Identity Fraud 

 
 

Digital identity fraud is another cybercrime where someone uses your details without permission. This happens if you click a link in your email, which takes you to a fake website, or when you share a lot of data on social media. It can have serious consequences; therefore, protect your details using two-factor authentication and strong passwords.  

 
 

An effective method of digital identity authentication, including username and password, along with additional layers of authentication, like tokens to verify internet sessions and fingerprint scanners, can ensure proper access control. 

 

 

  1. Biometric Authentication Reduces Operating Costs 

 
 

Biometric technology is the basis of all digital identity solutions designed in the field of cyber security these days. It offers opportunities that other ways of authenticating digital identities, like OTP codes and passwords, cannot guarantee.  

 
 

That's because using codes and passwords ensures the owner has the details but does not confirm the owner's identity. In contrast, biometric authentication does since it is non-transferable. 

 
 

Using innovative technology, like multi-factor biometric authentication, in different phases of a consumer's relationship with a company reduces operational costs to a considerable extent. Resetting stolen or forgotten passwords is a heavy duty for any IT or customer service department.  

 
 

But biometric authentication helps people remember passwords, reduces resource-consuming operational activities, and significantly saves costs. 

 
 

Other authentication methods like paperless, digital onboarding; OCR scan for automatic form filling; ID card recognition, and biometric handwritten signature on pdf further help to reduce customer acquisition time while improving security against fraud. Overall, this generates a modern company reputation dedicated to its customers. 

 
 

 

 

  1. A Versatile Methodology 

 
 

Undeniably, authentication technology is a practical and effective approach to creating a strong digital identity with various prospective uses. Other than using fingerprint sensors in different payment cards, it can even be used when strict identity authentication is needed.  

 
 

This involves creating efficient healthcare solutions where all records, insurance, and appointments can be linked securely and accessing government solutions, like tax records, welfare benefits, or passports. 

 
 

Digital identity authentication is also perfect for signing into digital streaming platforms, social media accounts, and emails securely while offering safe interaction with the Internet of Things devices. Besides allowing customers to make digital money transfers securely, identity authentication can also be applied in using cryptocurrencies and CBDCs or Central Bank Digital Currencies. 

The Bottom Line 

 
 

Organizations that are unable to gain customer trust gradually lose business. Perhaps, this is a solid reason why strict digital identity authentication procedures must be in place.  

 
 

Authenticating digital identities and following all associated best practices can give companies a competitive edge. Increased productivity, improved collaboration, low operating costs, and enhanced efficiency are all potential results of digital identity authentication.