Why Digital Identity Matters

Cybersecurity, data breaches, and identity theft

Have you ever had your identity stolen? At best it is an inconvenience and at worst, it can lead to catastrophic consequences. Having one’s digital identity compromised can be similarly disastrous.

In terms of cybersecurity risks, identity theft is one of the top issues related to digital identity, especially for organizations. Cybercriminals can use stolen credentials to wreak havoc on networks and systems, can put customer data at risk. That’s a data breach.

Data breaches precede identity theft. Protecting against data breaches and, in turn, identity theft, requires strong security measures to be put in place. It also helps when organizations perform regular scanning and monitoring across their network and systems to identify any irregular or suspicious activity.

Modern issues and challenges

As everyone grows more reliant on technology and more interaction moves online, digital identity becomes more crucial to understand and manage. Whether you are discussing financial transactions or healthcare data, digital identities intersect with every aspect of our lives. But this leads to challenges, too.

Ensuring the privacy of data is one issue: people and organizations need to protect their data from those attempting to access it. Another issue is establishing mechanisms for secure authentication and identity verification. These challenges are multi-layered and complex. For organizations, it comes down to addressing how they can mitigate risks associated with their digital identities without hampering their staff members’ ability to perform their job duties.

Personally identifiable information (PII)

Another term to understand within the larger context of digital identity is personally identifiable information (PII). This is any data that can be tied to or used to identify an individual. Information such as one’s name, home address, phone number, or Social Security number are all considered PII. The safeguarding of PII is critical to help individuals maintain privacy and prevent identity theft.

For organizations, protecting PII allows them to build and maintain trust with its customers or users. For example, think of a company that sells items online and has access to the credit card information of all their customers. If they suffer a data breach and expose that data to malicious actors, it could endanger a company’s customers and damage their brand.

Human identity vs. machine identity vs. cloud identity

Human identity refers to the digital identity of an individual or person. A machine identity is the identity of a specific device or system. Finally, cloud identity is an overarching identity solution that manages individuals and groups accessing a system.

Icons of a couple of devices surrounding a person icon

Digital identity issues for businesses and industries

Now armed with why digital identity is important – and what it is, and isn’t – the next logical step is to drill down into tangible impacts. While people need to figure out how to best manage and protect their own digital identities, it’s a critical consideration for businesses that are responsible for keeping their own – and others’ – data secure.

A general picture of digital identity for businesses and enterprises

Businesses need to take exceptional care managing digital identities to support both enhanced security measures and user productivity.

Organizations have employees to support them, and those employees have data associated with them. Those same employees also need to access the company’s IT systems and network. This is important because each employee will have a unique digital identity, and that identity can be used to enable access.

Companies must determine the best ways to protect and manage, maintain, and control their employees’ digital identities. This includes ensuring secure authentication, establishing privileged access management (PAM protocols), and managing employee access to sensitive company data.

As noted above, organizations need to protect their employees’ information while also ensuring the right people receive the right data at the right time with role-based access controls.

Digital identity for healthcare

Digital identity is particularly important in the healthcare industry, where patient information must be protected, and where access to clinical systems must be carefully managed. This includes managing the digital identities of clinical staff, ensuring secure authentication and access management, and managing access to sensitive patient data.

Patient information and privacy

Regulations such as the Health Insurance Portability and Accountability Act (HIPAA) require healthcare delivery organizations to take special precautions to safeguard patient information, which is captured as part of each patient’s digital identity. Failure to comply can lead to steep fines and other penalties on top of a loss of patient trust.

Drug diversion

The U.S. Department of Health and Human Services defines drug diversion as “the illegal distribution or abuse of prescription drugs or their use for purposes not intended by the prescriber.” When healthcare delivery organization employees misuse or steal drugs, it can put patients and other staff members at risk.

It can also lead to serious fines for the organization. With systems in place to detect and monitor activity (at the individual digital identity level) that could be related to drug diversion, healthcare delivery organizations can attempt to limit or eliminate this problem.

Read more about drug diversion.

How healthcare facilities can safeguard their systems with a holistic security strategy

Explore how healthcare organizations are approaching security risks, with an inside look from security leaders at hospitals, clinics, and health systems across the US and UK.

Digital Identity for manufacturing

In the manufacturing industry, digital identity plays a role in managing access to sensitive manufacturing systems and intellectual property. This includes managing the digital identities of employees, contractors, and partners.

Digital Identity for finance and banking

In the finance and banking industry, digital identity is crucial for protecting customer information and preventing fraud. This includes managing the digital identities of customers and employees, ensuring secure authentication and access management, and implementing strong security measures to prevent cyber threats.

Digital identity for governments

Governments around the world are increasingly exploring the use of digital identity systems for a variety of purposes, including streamlining traditional practices and procedures for citizen identification, taxes, voting, and social services. However, these systems also raise important privacy and security concerns, and must be carefully designed and implemented to protect citizen rights and prevent abuse.


Future issues and challenges

Current issues and challenges don’t stay current for long, and there’s always something new on the horizon. As technology continues to innovate and evolve, new issues and challenges surrounding digital identity will appear.

Digital identity, web3, and blockchain

Web3 technology, also known as the decentralized or the blockchain web, is an emerging technology that can change how individuals interact with the internet. Blockchain technology is a distributed ledger technology that offers a secure and decentralized approach to managing digital identities that could help solve many of the challenges associated with traditional digital identity systems.

One of the key benefits of blockchain technology is its ability to provide an elevated level of security and privacy. Because blockchain is a distributed ledger, it does not rely on a central authority to manage digital identities. Instead, users can manage their own digital identities using a private key, which provides more security and control.

There are concerns around privacy, however. Web3 relies on the use of public ledgers to store data which could potentially expose sensitive information to unauthorized access.

Another challenge is the issue of interoperability. Different blockchain networks use different standards, which can make it difficult for users to manage their digital identities across multiple networks.

More digital identity resources

The digital identity framework

The digital identity framework provides IT and security leaders with a toolkit to drive their IAM strategy.

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Digital identity assessment

Assess the effectiveness of your current digital identity strategy.

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Understanding digital identity

Explore the foundational concepts of digital identity

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