This article was updated on February 5, 2024.
Identity management can refer to how a company creates, verifies, stores, and uses its customers’ digital identities. Traditionally, many large organizations relied on a highly segmented and siloed approach. For example, marketing, risk, and support departments might each have a limited view of a customer, and the tools and systems that support their specific purpose.
Organizations are now shifting to a more holistic approach to enterprise identity management. By working together, departments help contribute to building a more complete, single view of a customer.
Some companies have renewed or increased their focus on the transformation during the pandemic, and the transition to an enterprise-wide identity management strategy can have long-lasting benefits. But it isn’t always easy.
Challenges of an enterprise-wide identity management strategy
Gathering the initial momentum needed to break out of a siloed approach can be particularly challenging for large organizations when each business unit has an ingrained identity system that meets the unit’s needs. Smaller organizations might have an easier time gathering consensus, but budget or technological limitations may be serious constraints.
Even after a decision is made and the budget gets set aside, organizations need to think through how they’ll create and manage a new enterprise-wide identity management system. It’s not a one-and-done upgrade. For the strategy to succeed, you’ll need to have processes in place to onboard, verify, secure, and activate the new digital identities.
Why use an enterprise-wide approach?
Motivations and specifics can vary depending on an organization’s size and structure, but some companies find a more holistic approach to customer identity management helps them:
- Improve customer experiences
- Save money by removing redundancies
- Boost sales with better-targeted marketing
- Better understand customers’ needs
- Provide faster and more relevant support
- Make more informed decisions
- Detect and prevent fraud
These benefits can play out across the entire customer lifecycle, and identity management systems are able to achieve this by pulling in data from various sources to build robust consumer identities and systems. Your internal, first-party data will be the most valuable and insightful, but you can append multidimensional data from third-party sources, such as consumer credit databases, demographic data or device data. And second-party data from partner brands or organizations.
Consider the regulatory and security challenges
An enterprise identity data management approach can also mean re-evaluating the applicable regulations and security challenges.
The passage of the E.U.’s General Data Protection Regulation and California Consumer Privacy Act marked an important shift in how companies need to handle consumers’ personal information — but that was only the start. Some U.S. states have also passed or are currently considering data privacy laws. Industry-specific regulations can apply as well, particularly in the healthcare and financial services industries.
It’s not as if a siloed approach lets an organization avoid regulation, but keeping current and upcoming laws in mind can be important during a large digital transformation. Additionally, consider how going beyond the minimum requirements could be beneficial. In a 2023 Experian white paper, we found that 61 percent of consumers want complete control over how companies use their personal data.1
Security also needs to be top of mind for any organization that collects and stores consumers’ personal information. An enterprise-wide identity management system may make managing increasing amounts of data easier, which could help decrease fraud risks. And your customers may be willing to help — 67 percent are open to sharing data if it will increase security and help prevent fraud.2
Keeping customers’ desires front and center
Experian partnered with Aite-Novarica to study enterprise-wide identity management. All but one of the 12 executives interviewed said client experience is a primary or predominant driver in the transformation of their identity management programs.3
Once implemented, a holistic view of customers can increase the experience in many ways:
- Meaningful engagement: You can deliver relevant and timely offers if you understand when, where and why consumers are interested in your products and services. Similarly, you’ll know who isn’t a good fit and won’t bother them (or waste money) by showing them ads.
- Verification: Using a single, persistent identity could make the initial and ongoing identity verification an easier process that doesn’t disrupt consumers’ lives or lead to frustration.
- Ongoing recognition: Nearly 70 percent of all consumers want businesses to recognize them across multiple visits.3 But you’ll need to study your customers to determine how much friction is acceptable. Some people prefer security over convenience and are willing to trade a little time to use extra verification methods.
- Customer service: Having more insight into a customer’s entire history and interactions with your organization can help you quickly respond when an issue arises, or even anticipate and solve potential problems.
- Security: Nearly two-thirds (64 percent) of consumers say they’re very or somewhat concerned with online security.4 Companies that can quickly and accurately identify consumers can also help keep them safe from fraud and identity theft.
While these may be some consumers’ top concerns today, continue listening to your customers to better understand their wants and needs.
Implementing an enterprise-wide identity management strategy
Identity management can become a daunting task, particularly as new data sources begin to flow. As a result, many organizations turn to outside partners who can help manage part, or all, of the process.
For example, an identity management solution may offer identity resolution and help create and host an identity graph (the database that stores the unique digital identities). A more robust offering may also help with other parts of identity management, including ongoing data hygiene and helping you turn your unique customer insights into actionable marketing campaigns.
Experience managing vast amounts of data is also important, as is access to additional offline and online data sources. In 2023, Experian found that 85 percent of companies said poor quality customer contact data negatively impacted their operation’s processes and efficiency.5 An enterprise-wide system that allows business units to update a single customer profile with the latest contact information might help. But working with a data provider that appends the latest info from outside databases could be a better way to ensure you have customers’ latest contact info.
When researching potential partners, also consider how their offerings and approach align with your goals. If, like others, improving the customer experience is a priority, make sure the solution provider also has a customer-first approach. In turn, this means security is a top priority — it’s what customers want and it’s important for protecting you and your reputation.
Learn more about Experian’s identity management solutions and how you can benefit from working with a company that understands identities are personal.