Identity & authentication challenges to online CX

17th May 2022

For any business with the smallest of toes dipped in the digital economy, identity is an issue that needs to be understood and accommodated. We are all used to an Internet where we are fundamentally anonymous and equally accepted to share information, but the problem with nobody really knowing who you are on the Internet is that … nobody really knows who you are on the internet. Digital identity has been an afterthought. And this is one of the biggest weaknesses in terms of cybersecurity and long-term sustainability of the digital economy. 

Each year, the Mobile Ecosystem Forum (MEF) surveys the level of trust in the ecosystem. From the 2021 MEF Survey, the top user concerns are: 

  • Being defrauded / losing money – 49%

  • Cybercriminals gaining access to my data – 49% 

  • Someone gaining access to my mobile – 47% 

  • My online activity being monitored – 43%

  • Losing data from my device – 41% 

Concerns over Personal Data Security and Privacy is now a reason to delete an app (37%), avoid installing one (33%) or stop using a service altogether (29%). The level of authentication/security is an element with clear impact to consumer preferences.

The 2021 data revealed a clear gap between the level of expectations from consumers versus real experience. The gap for mobile apps and services keeping data secure (versus the expectation) is 27 percentage points; the gap for privacy is 28 percentage points. This size of gap usually indicates a breaking point in the level of trust between users and a product. In short, the situation looks serious.

After scandals such as phishing or account take-overs, consumers are worried, and with good reason. In 2015, global fraud amounted to $3trillion dollars. By 2025, the figure will be $10.5trillion from fraud and cybercrime. 

Tackling online threats  

Globally, we are seeing a pronounced move towards an increasing reliance on digital identity and a clear move away from a distinctly unexceptional user experience and inadequate underlying security. Industry is having to develop new solutions that (a) meet the evolving needs of the user experience and (b) work to mitigate the threats. 

Online threats are becoming more intense, as is the inevitable fraud that drives these threats. Globally, 59% of enterprises surveyed in 2021 by MEF cited security and fraud prevention as the key driver for digital identity and authentication. The solutions becoming available seek to tackle some of the major issues we are currently seeing:

  • Device compromisation – where a hostile party can take control of a device remotely

  • Smishing - when fraudsters attempt to elicit sensitive personal data, passwords, or banking details through SMS (the most common ways to authenticate globally) 

  • SIM (Subscriber Identity Modules) swapping: where a mobile phone identity is swapped with the intention of taking over an account in order to impersonate the user (e.g. making calls, receiving authorisation codes etc.)

Clearly, there are inherent risks with online interactions and the sharing of personal data and the traditional ways of handling these are no longer fit for purpose.

The global economy needs solutions to the developing issues that personal identity and authentication present. There are three major pillars to these solutions: 

  • the role of the individual

  • establishing trust with organisations

  • handling the online experience.

Models for personal data and identity

We can identify three architectures that are developing and succeeding across the globe that link the individual’s attributes to databases. Interestingly, biometrics are the common thread across all these architectures:

  • Centralised model – often operated by a government or consortium of financial institutions. In this model, an individual’s information is handled on a centralised database from cradle to grave and has the effect of offering a simplified means of establishing digital identity for a range of services. An example of this approach is Singapore’s SingPass
  • Federated model – operating with a series of distributed databases that represent different groupings and where parties can access personal data in one of those databases. The European eIDAS system is an example of one federated approach where trusted service providers can issue and deliver digital signatures and identity. Countries adopting this model include Belgium, the Netherlands and Italy
  • Self-sovereign identity model – which has no centralised database where the individual owns, manages, controls, and issues their personal data.

Each of these models needs to ensure that the digital identity provided by a trusted service provider has strong authentication. In practice, we are starting to see the emergence of a new model based on these three models. This could be considered as the establishment of digital credentials. An example of this would be an individual’s Covid status. This would allow a person to obtain their signed and verified health credentials which would then be trusted for access to venues or travel. 

Clearly, there are issues around maintaining an individual’s privacy and how authentication fits into the process. Standards are developing that can provide further reassurance. Furthermore, there is the issue of regulation, how liability is distributed in this model of verifiable credentials, and how data is controlled and handled under regulatory requirements such as GDPR.

The role of mobile solutions

Mobile is a truly personal service, always present and mass adopted: it has carved a role as an identifier. What is emerging is, firstly, a pronounced move towards device-based technology and using the hardware device itself to authenticate the user and produce a result, such as face ID or fingerprints; and secondly, the role that the mobile operator can play by using the unique assets of a mobile device and knowledge of the SIM. One application of leveraging the SIM is ‘Mobile Connect’ which has been very successful in India. Solutions like this could be asking users to confirm a PIN code via their phone SIM. 

The solutions are still widely fragmented though. The level of security required by each action is different, as is the level of acceptable ease of use for authentication or verification. To approve a large bank payment, you might want to use a highly secure system and be happy to wait a few more seconds, but to manage your online game features or change your plane seat you might want something faster, even if it is not as secure.

We are seeing significant growth in approaches that are independent of either mobile device or mobile operator. These can be used when a device may be unavailable, for example, when it is lost or you are out of a coverage area. A mobile identity (as well as other biometrics) would be maintained through a cloud-based interface or another distributed means of authentication.

The future

The ecosystem is fighting back from the threats of cyberattacks and we will see more of these innovative solutions emerge. There might not be an overall winner, but the co-existence of alternative approaches is now expected. 

The good news is that the effort required to maintain security and reduce fraud will be significantly lessened by these technologies. This is because they will replace or enhance inadequate access control and authentication. Organisations and governments need this enhanced measure of multi-factor authentication to progress in the coming years. And individuals need the knowledge that their data is safe and that they can exercise trust in the integrity of it.



Dario Betti is CEO of MEF (Mobile Ecosystem Forum) a global trade body established in 2000 and headquartered in the UK with members across the world. As the voice of the mobile ecosystem, it focuses on cross-industry best practices, anti-fraud and monetisation. The Forum provides its members with global and cross-sector platforms for networking, collaboration and advancing industry solutions.  







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