The world is now a global village and all our daily activities revolve around our digitized identity. Everything takes place online be it shopping, applying for mortgage, setting up a new bank account or applying for visa online. As businesses and governments around the world set up their digital identities, there is not just a proliferation of virtual services but also virtual threats.
Financial fraud, identity theft and impersonation for the purpose of obtaining credit or loans are on the rise. Cyber criminals are stealing banking or credit card information and social security numbers. They also use it to pose as individuals and draw money from their accounts.
Decentralized identity saves the day
Thankfully, decentralized identity ledgers are serving as a front line of defense for attacks from cyber criminals. Securing user’s privacy is now easier than ever as decentralized identity management helps issuing companies to create foolproof credentials and for verifying companies instantaneously verify the legitimacy of them.
Since they use blockchain technologies to achieve this, decentralized identity is a secure and transparent way to record transactions. We no longer need to worry about identity thieves making purchases with our credentials and making us victims to legal liabilities.
Why is decentralized identity important in preventing identity theft?
Identity thefts result in financial loss and other troubles for all the concerned parties. On the consumer’s end, they will grieve the loss of their hard-earned money. Companies will face the loss of goodwill in the minds of their loyal consumers and see a dwindling consumer base for their failure in protecting sensitive data.
Banks will also be roped into investigation and will have to spend time and investment in boosting their security solutions. Luckily, decentralized identity systems are well-versed in risk aversion, security reinforcements and privacy magnification. Blending seamlessly with current security and privacy protocols, they easily pick up on anomalies and warn the institution about cyberattacks.
The future of Financial Technology
In a world that is centered on smart wallets, mobile payments, wearable payments and cryptocurrency solutions, blockchain has emerged as the savior for data protection. Hailed as the future of FinTech, it makes immutable and visible transactions possible. The lack of central authorities that tamper with data is its biggest advantage.
It is secure as it can’t be altered once the data is recorded on the blockchain. There is also easy public verification and everyone can view the transactions on the networks. Giving consumers complete ownership of their own data is the focus of decentralized identity management.
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