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The Value of Our Digital Identity THETHE VALUE VALUE OF OUR OF DIGITAL OUR IDENTITY DIGITAL IDENTITY Policy Series TABLE OF CONTENTS TATABLEBLE OF CON OFTEN CONTS TENTS PART 1 KEY MESSAGES PART 1 DIGItaL IDENTITY: A DRIVER OF GROWTH, A CONSUMER HAZARD OR BOTH? Digital identity: A driver of As the volume and variety of data grows, so does its value ................................ 23 growth, a consumer hazard Consumer research reveals a deep lack of trust ..................................................... 26 1 or both? PART 2 A DEFINITION OF DIGItaL IDENTITY AND HOW CONSUMERS REALLY SEE IT EXECUTIVE SUMMARY Understanding how consumers view their digital identity .................................. 37 Few consumers know how their data is used – fewer can control it ........................ 39 Many factors impact consumer decision making ................................................... 42 5 19 Consumer perspectives on the proposed EU privacy regulation ........................ 47 PART 2 PART 3 PART 3 A definition of digital The value of digital identity – THE VALUE OF DIGItaL IDENTITy – foR ORGANISatIONS AND CONSUMERS Traditional production ................................................................................................... 56 identity and how consumers for organisations and Retail .................................................................................................................................. 62 really see it consumers Financial services ............................................................................................................ 67 Telecommunications and media ................................................................................. 73 Public services / health ................................................................................................... 77 Web 2.0 communities .................................................................................................... 85 E-commerce ...................................................................................................................... 91 33 53 Online info / entertainment .......................................................................................... 95 PART 4 PART 4 Part 5 THE MEGatrENDS OF DIGItaL IDENTITY The megatrends of digital A practitioner‘s guide to the A growth driver for a stagnant economy ............................................................... 101 identity future of digital identity The six key trends in digital identity applications ................................................. 105 PART 5 A PRACTITIONER‘s guiDE TO THE FUTURE OF DIGItaL IDENTITY Innovative approaches to building trust .................................................................. 113 Guiding principles to unlock the value of digital identity ................................... 114 99 109 APPENDIX ...................................................................................................................... 117 Key Messages key messages KM1 | 2 KEY MESSAGES Key Messages KKEYEY MESS MESSAGES AGES • In an increasingly digital society, personal data • All told, the value created through digital iden- • Most consumers have little idea what happens • Overall, given proper privacy controls and suf- has become a new form of currency. The biggest tity can be massive – at a 22% annual growth to their data. Only 30% have a relatively com- ficient benefits, most consumers are willing to challenge for political and business leaders is to rate, applying personal data can deliver a €330 prehensive understanding of which sectors are share their personal data with public- and pri- establish the trust that enables that currency to billion annual economic benefit for organi- collecting and using their information. Indivi- vate-sector organisations. They want to spend keep flowing. sations in Europe by 2020. duals with higher-than-average awareness of their new currency on deals that they like. data uses require 26% more benefit in return for • “Digital identity“ is the sum of all digitally • Individuals will benefit to an even greater de- sharing their data. • To unlock value, organisations need to make the available information about an individual. It is gree, as the consumer value will be more than benefits of digital identity applications very clear becoming increasingly complete and traceable, twice as large: €670 billion by 2020. The com- • Few individuals are in control of their digital to consumers. Further, they need to embrace the driven by the exponential growth of available bined total digital identity value could amount identity. Just 10% of respondents had ever done new digital identity paradigm of responsibility, data and the big data capabilities to process it. to roughly 8% of the EU-27 GDP. six or more out of eight common privacy-pro- transparency and user control. tecting activities (e.g., private browsing, disab- • How digital identity develops is an important • However, two-thirds of potential value genera- ling cookies, opt-in/out). However, consum- • Privacy is increasingly becoming an area of com- concern for consumers and companies alike. tion – €440 billion in 2020 – is at risk if stake- ers who are able to manage and protect their petition for organisations, which can differen- Individuals are worried about losing both their holders fail to establish a trusted flow of data. privacy are up to 52% more willing to share tiate themselves by providing the right privacy privacy and control over their personal data. information than those who aren‘t – presum- controls and privacy-by-default product design. Companies, on the other hand, fear that mis- • Digital identity is relevant not just to Web 2.0 ably because they can adapt their data sharing Indeed, such a scenario may well play out in the steps – be it through their own, or third-party companies, but to the economy as a whole. The to their individual preferences. desktop and mobile Web browsing market. applications – could compromise their position public sector and health care industry stand to as trusted provider. profit most from personal data applications and • Trust differs per sector: Consumers are on • Policy makers and regulators need to ensure are expected to realise 40% of the total organi- average 30% more willing to share data with adequate privacy safeguards and maintain a • Global trends including the social media boom sational benefit. e-commerce companies, cable operators and flexible approach that will encourage new appli- (a quarter of the world‘s population will be automobile manufacturers than with Web 2.0 cations and allow consumers to make their own members of online social networks by 2015) • While the retail and Internet sectors already communities. informed choices on the extent to which they and the burgeoning “Internet of things“ (some extensively use personal data, other sectors like wish to generate value from their digital identity. 75 million machine-to-machine connections traditional production and the aforementioned • The “right to be forgotten“ has a small but con- will be added in Europe by 2015) result not public services are in the infancy of digital iden- sistently positive impact on the willingness to • Political intervention must account for shifting only in increased information volume, but also tity value generation. share, increasing it by 10% to 18%. levels of acceptance regarding digital identity completely new types of data. applications and the developments in the glo- • Consumer concern has grown along with the • The preferred form of consent strongly depends bal marketplace. Failure to do so may hamper • From a macroeconomic perspective, it becomes increased use of personal data. 88% of people on the type of data: Opt-out is considered innovation as well as the competitiveness of do- clear that digital data is already a growth driver who are online consider at least one industry a adequate for less sensitive data by 69% of re- mestic industries. Finding the right balance can in an otherwise flagging economy. While tradi- threat to their privacy. Yet consumer research spondents, while opt-in is required for highly spur local investment in digital identity appli- tional industries shrank by up to 3.6% from conducted for this study shows that stated con- sensitive data by more than 80%. The issue of cations and also attract industries to European 2008 through 2011 in Europe, data-intensive cerns by individuals do not necessarily result in consent highlights a key dilemma: Control is markets that provide a safe haven for personal sectors – where the use of digital identity is a key behavioural change. important to consumers (82%), but so is conve- data. component of business – thrived with annual nience (63%). growth rates between 15% (e-commerce) and up to 100% (Web 2.0 communities). 3 | 4 Executive Summary executive summary ES5 | 6 EXECUTIVE SUMMARY Executive Summary EEXXECUECUTIVE TSUMMIVEAR SUMMY ARY “Digital identity“: A driver of growth, a con- Views on digital identity tend to take one Digital identity can drive massive growth in an It is important to realise that, sumer hazard or both? of two extremes: Let organisations do what they otherwise stagnant European economy although the public debate on mone- need to in order to realise the economic poten- tisation of personal data is dominated Increasingly, we are living double lives. tial of “Big Data,“ or create powerful safeguards Taking a macroeconomic perspective, it by the perspective on Web 2.0 players, There is our physical, everyday existence –
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