Whether we’re booking a flight or shopping online, we must go through multiple authentication processes to prove our identity. And that’s quite important from an infosec perspective.
However, proving our identities doesn’t necessarily need to be a complicated process, as the slightest bit of friction in authentication could be the reason for customers to switch vendors.
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So, what could be the best way to ensure a frictionless authentication method without compromising authentication security?
Here’s where the critical role of verifiable credentials comes into play.
Verifiable credentials ensure individuals have total control over their personal information and just need to verify their data instead of providing it.
Let’s understand the aspects of verifiable credentials and how it’s swiftly becoming the need of the hour for business privacy, security, and growth.
What Are Verifiable Credentials? Why Are They Crucial for Online Platforms Today?
The credentials or identity proofs we use today, including ID cards, user IDs, and passwords, or other identification cards, don’t blend with the digital world since everyone expects a great user experience.
But the authenticity and trustworthiness of a physical ID card can’t be compared since it’s a document released and verified by the government authorities.
Verifiable credentials are based on a web standard approved by W3C back in 2019 and are considered secure digital equivalents of paper documents that users carry in wallets to prove their identities.
They allow a seamless and smooth authentication through a combination of public key cryptography and privacy-preserving methods.
Verifiable credentials help disclose specific information about a user required for authentication without exposing the real (sensitive) data.
Users can quickly authenticate themselves online without using their physical identification cards or credentials in a way that assures sensitive data isn’t directly shared, and the user is authenticated.
Cybercriminals are already finding loopholes and new ways to breach networks. And physical documents can be easily forged, and hackers can access sensitive user data.
On the other hand, verifiable credentials could be easily stored in digital wallets (just like other documents stored in a physical wallet) and can be used to prove identity.
Users can present these digital credentials to authenticate themselves on various platforms without any security risks since their data isn’t floating or stored on the cloud or other databases.
Digital Privacy and Selective Disclosure of Information
Since digital privacy is the priority for businesses embarking on a digital transformation, selective disclosure of information through verifiable credentials could be the best way to ensure greater privacy.
Selective disclosure helps users to ensure they share only specific information with online platforms without affecting sensitive information.
And verifiable credentials provide a more robust and sophisticated approach where users can have complete control over the details that they wish to share and what they don’t. Hence, overcoming the barriers of data privacy and data redundancy.
For instance, users can share details about their age or address and hide further information about their physical appearance.
But the question is, why is it necessary to reinforce privacy for overall business growth?
The digital era has offered endless possibilities but has given rise to specific threats to digital privacy. And this means businesses that aren’t thinking about user privacy lag behind their competitors.
Apart from this, users are now more concerned about how brands collect, store, and manage their personal information and are hesitant to disclose all details the first time they interact with a brand.
Hence, enterprises must ensure they collect and store the required information, and users quickly offer consent for the same.
Benefits of Incorporating Verifiable Credentials for Online Platforms
Since renowned brands already leverage verifiable credentials through a robust customer identity and access management (CIAM) solution, businesses ignoring its potential would face growth consequences.
Here’s the list of benefits that a business could embrace by incorporating verifiable credentials:
#1. Privacy and security
Many businesses are facing identity theft issues, which is perhaps why the need for a robust authentication mechanism becomes crucial.
Cybercriminals could easily bypass the conventional authentication mechanisms that use the user ID and password authentication since they aren’t backed with multiple authentication systems.
On the other hand, these issues are nonexistent with verifiable credentials since every bit of information is digitally signed. The issuer properly encrypts data through the holder’s public key, and the login credentials can only be viewed by the user (holder).
Hence, no third person could get a hint about your credentials/details, which otherwise increases the threat vector.
#2. Complete control over data
Businesses can get total control over their data and ownership through verifiable credentials. This helps them analyze non-sensitive data and filter it from critical data that can be used to authenticate securely.
Also, brands can achieve a granular level of control over user data and use just one credential for authentication rather than complete details.
#3. Helps meet compliance
Another great benefit of incorporating verifiable credentials is that it helps businesses maintain global data privacy and security regulations.
With global privacy and data protection regulations, including the GDPR and CCPA, becoming more stringent, brands that aren’t incorporating adequate privacy and security measures could face hefty fines.
And when a business incorporates verifiable credentials into its platform, it helps comply with several data privacy and security regulations.
Hence, to avoid fines and reputational damages, brands should quickly put their best foot forward in adopting verifiable credentials for their websites/applications.
The rapid adoption of technology has helped businesses thrive and succeed but has also increased risks about privacy and security.
Moreover, customers are now concerned about their privacy and how brands collect and store their personal information. Hence, a little loophole in managing crucial user information could be fatal for a business.
Verifiable credentials can help businesses seamlessly authenticate users without collecting heaps of information. Users must prove their identities by validating the data and not sharing actual information, which helps maintain adequate privacy.