The world is steadily going digital thanks to the ongoing proliferation of broadband access, high-speed mobile and IP. But the transition of personal identity to the digital domain - and its protection from fraudsters - remains a serious challenge.
That was one of the findings reported in the eighth annual Internet report from the International Telecommunication Union's Strategy and Policy Unit (SPU), which this year focuses on consumers and how their lives are being continuously shaped and re-shaped by digital technologies.
According to the report, 'digital.life', the core issue of digital identity management currently revolves around two concepts: the ability to create alternate identities on the Internet, and collecting personal data from users.
'Challenges for identity management in today's digital world arise from the growing fragmentation of identity (e.g. the use of false identities), the lack of limits on the collection of identity parameters online, and unclear guidelines for the retention of data,' the report says.
The question of aliases has raised serious debate between governments that want to limit anonymity for purposes such as curbing fraud and tracking suspected terrorists (for example, requiring registration for prepaid SIM cards) and civil liberties groups who say anonymity is essential to privacy and free speech (for example, fairly criticizing the government or your employer without fear of reprisals).
From the point of view of consumers, says report co-author and SPU head Dr Tim Kelly, the biggest issue concerning their digital identity is that someone could steal it.
'We conducted a Web-based poll of user opinions about online fear,' Dr Kelly told the Show Daily. 'We were expecting spam or viruses to be the main online fear, but in fact the most reported was theft of personal information.'
Ironically, incidents of identity theft online are relatively rare. According to Javelin Strategy & Research, 90% of personal data theft takes place offline, while in the US, less than 5% of Americans have reported ID theft in some form.
However, says Kelly, the fear of ID theft is a significant barrier towards the 'digital world' simply because when it does happen, the effects can be devastating, and not just for the individual. 'The consequences would also have a serious detrimental effect on the trust and confidence in the online world,' he says. 'It challenges the whole concept of the Web as a safe place to do business.'