While we typically think of major players in the social media world serving as identity providers (IDPs), such as Facebook and LinkedIn, companies in other industries are recognizing the opportunity. A growing number of businesses see the strategic value their customer identity data brings to their digital business initiatives. Organizations are realizing that one of the many ways they can leverage this data is by becoming an IDP.
Yet, becoming an IDP is not for everyone. There are some essential elements that must be in place to make monetizing identity data a successful revenue model.
- You need to be a trusted vendor or resource for identities.
Identity verification is critical to successfully serving as an IDP so it’s important to be a trustworthy resource. Most government and financial institutions have already established a high degree of credibility. They deal with sensitive financial and personally identifiable information (PII) daily.
- You must be a good steward of the data.
Have the best possible security practices and data access governance controls in place to prevent data breaches. Don’t share data without the users’ consent, and respect your customers’ data privacy. Be transparent about how and where you use your customers’ information.
- Have rich profiles that include more than name and address.
Collect a wide range of data from your customers, including explicit product and service preferences as well as privacy choices to provide your IDP partners with high value data they can use to cross-sell, upsell, and deliver better customer experiences. This is where an identity management platform can provide invaluable capabilities.
- Build a reputation as an IDP.
Momentum is particularly important in becoming an established IDP. The more third parties accept you as an IDP, the more partners you will be able to bring on board.
Another key factor in establishing your brand as a trusted IDP is being able to offer a holistic view of each customer. It’s important to have identity data management capabilities that enable you to aggregate the information you are collecting at each touch point, department, channel and app. Without this 360 view, it is hard for your partners to leverage the data in meaningful ways, and you lose credibility as a trusted IDP.
As we saw with the social media players, many brands tried to become IDPs, but eventually the industry was narrowed to only two or three leaders. We will probably see the same thing happen as other industries begin providing IDP services in this competitive space. Companies will need to establish a virtuous cycle to ultimately emerge as a leading IDP. They will need to collect high value customer data, including preferences and privacy consent, as well as build a reputation with partners as a reliable resource for quality data. At the same time, they will need to become known as a company that customers can trust to use their data responsibly.
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