Social credentials to define retail customer identities

Let's face it, for a large number of users, Internet essentially means Facebook or Twitter. Such has been the impact of social media on our daily lives. It is no surprise then, that experts predict that by the end of 2015, as many as 50 per cent of all new retail customer identities will be based on social network identities.

According to research firm Gartner, along with federation technologies and mobile computing, social identity adoption will have a major impact on the practice of identity and access management (IAM) in 2013 and beyond.

Says Ant Allan, research vice president at Gartner, For an increasing number of Internet users, social networks are the Internet. Using login with Facebookor other popular social networksreduces friction and therefore improves users' experience of customer registration and subsequent login. For registration, the required personal information can be imported from users' social profiles, reducingif not eliminatingform filling. Moreover, using a social network identity means users don't have to remember rarely used passwords or endure convoluted password reset processes when they forget them.

Allan argues that use of social identities for authentication reduces the number of abandoned registrations and logins, and makes it easier for customers to browse and buy. Therefore, it also helps organizations attract and retain customers.

However, the lack of identity proofing and weak authentication for social network identities can expose merchants to more fraud. Service providers therefore have to defend themselves. They may allow social network registration, but augment the process with additional controls when a retail site provides access to sensitive data and monetary transactions. Alternatively, merchants may accept the increased risk without additional controls because of the potential increase in the number of customers and the volume of purchases; this approach "passes the buck" to payment card companiesbut they already have robust fraud detection and management tools and processes in place.

It's important for IT leaders to remember that, despite the increased risk of fraud, social network identity proofing and user authentication are no worse than the practices currently used by many businesses. In fact, social network identities could offer better identity proofing than raw customer registration. This is because social network analysis can potentially identify bogus social identities, and some vendors can exploit the wisdom of crowds to verify claimed social network identities, Allan opines.

However, using social network identities for authentication may not suit all organizations. Businesses offering consumer-facing services, as well as government agencies offering citizen portals, should assess the benefits of accepting social network identities for customer and citizen registration and login, cautions Allan. They must also weigh these against the risks posed by the lack of identity proofing and weak authentication for social network identities. Mitigating these additional risks may offset any cost savings.

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