Will surging number of new retail customer identities based on social network give rise to more fraud?

Gartner says that by the end of 2015, half of all new retail customer identities will be based on social network identities, that’s up from five per cent today. Obviously, the number of new RCI in 2015 is likely to be lower than in 2013 because captured audiences can only, in theory, adopt one social identity at a time for any service.

Ant Allan, research vice president at Gartner, said that “For an increasing number of internet users, social networks are the internet. Using ‘login with Facebook’ — or other popular social networks — reduces friction and therefore improves users' experience of customer registration and subsequent login”.

He added “For registration, the required personal information can be imported from users' social profiles, reducing — if not eliminating — form 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.”

Organisations may benefit from the use of social identities for authentication purposes since it allows users to sign in more easily and quicker. For example, new users will only need to validate the use of a social network login details during the authentication process rather than going through a tedious registration process.

But Allan also underlined the associated risks. “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”.

Gartner will be holding its annual Identity and Access management summit on 11 and 12 March in London. ITProPortal readers can get a €300 discount by using the code GPIAM1 and registering at gartner.com/eu/iam.