The Age of Consent – The Case for Federated Bank ID

The Age of Consent | The Case for Federated Bank ID 9 Dr Brad Pragnell, Principal, 34 South 45 North Payments Canada’s Modernization initiative is gathering pace and collaborative initiatives such as SecureKey have brought together banks, payment schemes, telcos and technology providers. For a number of years, Canadians in a number of provinces have been able to use their banking credentials to access government services. And to facilitate this ecosystem, the Digital ID and Authentication Council of Canada is consulting on a Pan-Canadian trust framework. Digital identity initiatives remain formative in Australia — the Australian Payments Council (APC) has made a bank-based digital identity one of its key initiatives and the federal government has made consent a central pillar in their open banking reforms. Though digital identity efforts remains formative, the APC’s efforts along with the NPP’s PayID alias service and its proposed “consent and mandate vault” service may provide some of the building blocks for full-blown digital ID. Hiroshi Kawagoe, GM, Transaction Business Planning Department, SMBC In the aftermath of the global financial crisis, the Global Legal Entity Identifier (LEI) System was established to provide a standardised way to identify parties to financial transactions and help manage financial risks. Over 1.4 million LEIs have been issued under a federated model as a public-private partnership. The global adoption of LEI has the potential to bring transparency to many financial transactions. For example, the Reserve Bank of India recently said that LEI should be explored to identify the parties involved in cross-border payments. 14 LEI combined with shared KYC utilities and federated Bank ID schemes have the potential to bring greater transparency and security to global digital commerce. Simon Black, CEO, PPRO There is increasing friction for consumers and business as governments and regulators look to increase security and address the growing threats of fraud, money laundering and terrorist financing. Consumers wrestle with clunky user experiences that result in friction at the checkout or difficulty in getting access to services they want to sign up to. For businesses seeking access to financial services, KYC creates huge inefficiencies as, time after time, each financial institution has to request the same information on the individuals behind the business. Inaccuracies and errors resulting frommulti-step, manual approval processes can result in lost business. Federated Bank ID would solve these issues for consumers, businesses and their service providers. It would accelerate adoption and innovation in the digital space. Standardised Bank ID would promote consumer choice of payment method, bank and service provider, all as easily and securely as with any alternative. Kenneth Tessem, COO, BankID BankID has been transformative for Sweden and its benefits can apply to many other countries. We have learned many lessons throughout its development and so we have a wealth of experience to share with other countries thinking about the foundations for a digital economy. Our spirit of partnership and collaboration has meant that we are now an almost cashless society and the digital sector is blossoming. We extend an open invitation to other countries to learn from our example and benefit from our continued journey. Michael Salmony, Executive Adviser, equensWorldline SE “If you have solved identity, everything else is just accounting” said my old university professor. Identity is the basis for everything else in the digital economy, in banking, in payments. Once one has assured it is the right person (or thing!) and does have sufficient rights, then the rest is indeed often mere bookkeeping. Since this is a topic so fundamental to all industries, all should work together in a federated way to make this work. Banks have ideal prerequisites (KYC, trust, network, etc) and must have an interest in playing a key role here. Especially since identity is bigger than payments. We pay ca 2-3 times per day, but we need to identify ourselves (log in, verify credentials, access emails, open doors, sign documents, …) many more times than this. So the volume of Identity is much bigger than the volume of payments. Also the value of an identity transaction (being the basis for all digital business) is clearly much higher than the value of processing a payment transaction (which is tending towards zero). Thus a federated identity system with banks playing a key role is in the interest of everyone: of keeping us all safe, of enabling the digital economy and of providing new business avenues for banks.