Digital Identities Abound & Few Understand How They Work

More than half of consumers use digital identities every day to perform transactions online, but few of them know what digital identities actually are or how they work, according to new research.

In a survey of over 1,000 U.S. consumers, San Diego, Calif.-based identity verification technology firm Mitek found that 65% used digital identities daily, but only 25% said they fully understood digital identities.

“As digital transactions become more pervasive in our everyday lives, consumers are increasingly turning to their digital identities to validate and secure the accounts they use to bank online, transact with apps and interact with each other,” Mitek CEO Max Carnecchia said. “The problem, however, is that while consumers show a growing appetite for digital convenience, many users have a different understanding of what digital identity actually means and remain concerned over the protection of their information.”

A person’s digital identity is a body of information about the individual online, including unique identifiers and use patterns, according to Mitek.

“The problem, however, is that everyone has a different point of view relative to the meaning and use of their digital identities,” the company said in the study. “Consumers are confused — and in some cases, they’re wary of what risks the conveniences may expose. For instance, while a digital identity allows consumers to transact from anywhere and more easily manage various ID cards, it also poses a potential single point of compromise that malicious hackers can use to steal all of that personal information.”

More than half of the respondents said they considered social media profiles, usernames and passwords, browsing histories, transaction histories, personal opinions shared online, digital logs, online images of ID documents and online gaming profiles to be part of their digital identities. For at least one in three respondents, medical history records and voice assistant records also counted.

Mitek also found that most people (72%) viewed the use of digital identities as convenient but also a potential risk. The majority said they were most worried about having their information stolen, the potential for criminals to impersonate them, losing money and the prospect of companies sharing their data for profit.

They were also wary of certain biometric verification methods, according to the findings.

A quarter of the respondents said they were uncomfortable using eye retina scanners to prove their identities, for example, and 21% were wary of face recognition. However, only 17% and 12% were uncomfortable using handprint scanners and fingerprint scanners, respectively.

“Consumers are understandably wary about using biometric verification methods when it comes to their personal data and finances,” Carnecchia said in the report. “After all, the first major hack of biometric facial data was just reported earlier this year, and that leaked information poses a potential risk for any exposed users when using biometric security technologies in the future. The fact remains, however, that biometric identity verification solutions offer much greater security than traditional username/password methods.”

Despite their worries, people in the survey also said they found value by using digital identities. Over half (52%) said they would share information with companies to get rewards or benefits, and 43% said they liked the personalization they got from companies.

“Given the widespread impact and awareness around data breaches and hacks, consumer sentiment around passwords and security-based questions may be changing,” the study noted. “Americans are now more worried about cybercrime than violent crimes, with 71% worried about having their personal or financial information hacked and 67% worried about being a victim of identity theft.”

More than half of the respondents (60%) said they felt powerless to protect their identities in the digital world, however.