User-centric, federated identity systems have the potential to improve the security and privacy of authentication and services, but if improperly designed, the systems can negatively impact users and become a burden, according to a new report from the Center for Democracy and Technology. The paper by CDT policy analyst Heather West comes as the U.S. government begins a series of pilot programs through the Center for Information Technology, the National Institutes of Health, and the Department of Health and Human Services that will use third-party user credentials to authenticate users of federal Web sites.

The term "user-centric identity" refers to systems where users, rather than service providers, control their identity credentials, CDT said in a Monday press release. A similar concept in the offline world would be using various forms of identification for whichever transaction one chooses. The white paper discusses key components of a user-generated identity system (such as trust frameworks, users and identity providers) as well as the benefits and liabilities of federated identity management. A copy of the CDT document can be found here (PDF).