Strategically establishing address validation as part of a digital identity

Abstract

The initial goal of this graduation project was to find a way to establish a reliable digital relationship with PostNL’s consumer. This is considered an important part of a digital transformation strategy that is necessary for traditional postal companies to stay relevant in a digital era. One of the main challenges of this digital era, relevant for PostNL, is the increasing uncertainty of knowing who one is dealing with online. This assignment focuses on the idea of implementing a digital identity (eID) that can be used during digital and physical encounters with PostNL and is able to provide the desired certainty to ensure a more safe and seamless service. Thereby the focus during this project is especially on how this digital identity can be established, with whom and which certainties are absolutely necessary for doing so. Digital identities that enable a consumer to prove who he or she is online, can exist out of multiple attributes that define this (online) user. Worldwide these digital identities are increasingly being adopted by companies active in multiple service industries, including LSPs. However, this does not mean that companies can simply request all kinds of data from their consumers to confirm the needed attributes. With regard to regulations including those concerned with privacy (GDPR), they are required to keep data processing to a minimum and are therefore only allowed to request data that is absolutely necessary. For PostNL, it was found that sufficient desired certainty would be possible to be established by personal validation or address validation. Although consumers do see PostNL as a reliable party (the most reliable within the Netherlands), they do not seem to be willing to (digitally) share sensitive personal information such as a picture of their ID with PostNL. Address validation on the other hand does not require too much personal information about an individual but does provide the assurance that that individual has a high probability of righteous access to the address he/she uses online. For PostNL this is most important since they provide logistics services at these addresses. As a privatized company that is not allowed to simply make use of governmental databases, PostNL is currently mainly dependent on other (commercial) parties. However, it is highly desired to establish certainty themselves, create and keep data internal. This resulted in the suggestion of a multilayered address validation system enable to establish different types of address certainty. In the ideal situation, a consumer should be processed through as many layers as possible to realize maximum certainty. Thereby the starting point is to make it as convenient as possible for consumers while raising a threshold as high as possible for fraudsters. Not only does this strengthen security, but it also increases the reach as each type is being preferred by a different group of consumers. It also enables PostNL to create, use and keep internal data while offering significant added value for the consumers in return. One element of this system has shown high potential and was selected for further elaboration, namely Stikky: a smart solution that combines the physical with the digital. It enables consumers to prove that they have righteous access to an address, while simultaneously adding significant value to them. As a result, this enables PostNL to achieve a higher first-time-right while simultaneously making it more difficult for malicious people to commit package fraud. Interesting target groups for Stikky are considered: frequent orderers, digital-savvy millennials living in urbanized areas, and worried receiving consumers. Finally, a design roadmap has been discussed that shows the long term strategy towards a multi-purpose eCommerce-ID. To have a starting point for this, also a short-term implementation plan has been provided that guides Stikky the way to a successful market introduction within six months.