The Age of Consent – The Case for Federated Bank ID

Treasury and Trade Solutions 8 Denmark combines its famous “hygge” concept of cozy togetherness with advanced tech. This small nation was named the most digital country in the Europe in 2018 — this small nation of 5.8 million people is a frontrunner in 4G, internet usage and digital public services. 12 Its government has saved USD300 million annually in self-service efficiencies and aims to unlock a further USD8 billion of benefits. The Danish use the NemID 55 million times a month. This scheme will be replaced by the MitID in 2021, replacing physical code cards with more digital solutions that comply with EU eIDAS regulations. 13 India has been the posterchild for digital ID through its national Aadhaar scheme that has enrolled over 1.2 billion people. While Aadhaar provides a solid base to the India stack and helped bring 350 million people into the banking system, it has also faced privacy challenges. India is seeking to balance the benefits of digital ID with the need to protect personal data. While Aadhaar famously means “foundation” in Hindi, people are waking up to the reality that data protection needs to be enshrined in law before we build digital ID schemes. Privacy and consumer education are the true foundations of the digital economy. Erin Mccune, Partner, Glenbrook Partners Federated digital ID infrastructure would bring great benefits to the United States in a consumer context, but it may be even more transformative for B2B transactions. As new push payment rails become available, businesses need to publish their payment address — in effect, proclaiming “send money here”. Unlike consumers, businesses typically utilise multiple financial solutions: at least one bank, a card acquirer, an accounting/ ERP platform, often a separate billing/invoicing provider, and an accounts payable and/or a procurement solution. An increasing number of these business solution providers enable payment. Many of these providers suffer from network fantasies, hoping to achieve scale and differentiate by serving a proprietary ecosystem of business buyers and their suppliers. Businesses need to manage not only their identities and access to their payment credentials across the ecosystem of their own providers — but also those of their counterparties with whom they exchange invoices and payment. The small community bank, mid-sized regional bank or national/ global treasury bank where a business maintains its operating account is the most logical custodian of its digital ID regardless of the business process or transaction context. In concert with open banking permissions/consent, directories that enable look up and new real-time request-to-pay messages, a federated digital ID would allow businesses to confidently transact with a wide array of trading partners.