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The evolution of consumer identity: Five predictions for 2016

Thanks to the continued growth of regional privacy regulations, the Internet of Things and biometric authentication, 2015 saw a marked change in the way leading enterprises approached and understood customer identities.

2016 promises to be a year of enhanced development in the consumer identity and access management (CIAM) space, with customer experience, data privacy and personalisation proving to be increasingly critical components of business success. Let’s take a look at five identity-related trends we foresee taking hold in the New Year.

1. Traditional usernames and passwords will begin to die

Consumer patience is all but disappearing as real-time, frictionless access to information, applications and social connections proliferates. Technologies like social authentication and Apple’s Touch ID have become exceedingly popular in light of the increasing emphasis on convenience.

According to a 2015 survey, 88 per cent of US consumers claim to have logged into a website or mobile application using social login, citing dissatisfaction with spending time filling out registration forms as the number one reason why they choose to log in socially.

2016 is poised for a continuation of this trend, with traditional usernames and passwords slowly moving toward extinction. As advanced means of biometric authentication gain greater adoption and mobile becomes the new norm, consumers will continue to opt for signing in using their existing social (Facebook, Twitter, etc.) and payment (Amazon, PayPal, etc.) credentials or thumbprints over creating and remembering another username and password.

2. Global enterprises will adopt multiple international data centres to remain compliant

2014 saw the mandate that all Russian citizens’ data must be stored within Russian borders. 2015 saw the invalidation of the EU-US Safe Harbour agreement. And 2016 will see leading enterprises adopt multiple data centres across the globe to adhere to localised data privacy regulations.

Additionally, with international enterprises now required to manage their users' data in multiple geographies and support unique scenarios like users moving from one region to another, on-premises storage of consumer data is becoming increasingly costly and unfeasible. The growing need to comply with new and evolving regional data regulations will also drive businesses’ on-going migration to cloud-based identity and data repositories.

3. Data brokers’ revenues will decline due to brands focusing on first-party data

Data brokers have built a multi-billion dollar industry dedicated to sourcing and selling consumer information from a variety of places, including surveys and questionnaires, public records like voter documentation, enterprise insights from loyalty programs and more. However, modern brands are finding that these third-party consumer profiles are often outdated, limited to device-specific insights and simply inaccurate due to being pieced together from a variety of disparate sources.

Uncertainties regarding the accuracy, completeness and origins of this data make it nearly impossible for marketers to know exactly who they’re reaching and to effectively measure the success of their campaigns, causing more brands to turn to first-party data. Because it is collected directly from customers and takes multi-device activities into account, first-party data is much more reliable than third-party data.

In addition to being essentially free to collect, first-party data lowers campaign costs by enabling marketers to target audiences with highly relevant messaging, minimising the number of impressions it takes for users to engage and driving conversions at a faster and higher rate. For these key reasons, we predict that 2016 will be the year that data broker revenues begin to decline.

4. Security and customer experience will converge

For marketers to create relevant user experiences, they must be able to identify and connect with customers as they move across today’s landscape of channels and connected devices. However, user tolerance for security barriers like passwords and CAPTCHA is diminishing, causing them to abandon these barriers in search of newer and more convenient experiences.

To continue to earn access to customer identities and data, companies must deliver the frictionless registration and engagement processes that users expect. This is a new concept for IT leaders accustomed to focusing on captive employees, who have no choice but to deal with latency and strict authentication protocols when it comes to internal business systems.

We believe that, with continued development for biometric forms of authentication and API-focused security, for example, 2016 will find more leading brands striking a balance between usability and security, adopting the tools needed to maximise frictionless user experiences while minimising risk.

5. The importance of the IDoT will eclipse fascination with the IoT

Cisco projects that the Internet of Things (IoT) is a $14 trillion revenue opportunity, making smart, connected products – and the technologies that make them tick – drivers of huge new growth opportunities. However, according to Gartner, Inc, “Managing identities and access is critical to the success of the Internet of Things,” making the Identity of Things, or IDoT, the new focus of the IoT.

The IDoT is based on the principle that all entities in the IoT ecosystem – including people, apps, services and connected things – have identities comprised of identifiers and their attributes, and that those identities define relationships between every entity.

Managing the data that flows between these identities requires an identity management solution that unifies every entity in the system – a core requirement for businesses looking to capitalise on the IoT in 2016.

Patrick Salyer, CEO at Gigya (opens in new tab)

Image source: Shutterstock/Jirsak