Tech competition will hinder digital identity adoption

With banks and financial services closing physical branches and large parts of the population unable to leave their homes, organisations are hoping to utilise digitalised identities – but the fact there are no industry standards or protocols is causing concerns. “We’ve always been quite competitive and this is a whole new world for us, and …

by | May 15, 2020 | bobsguide

With banks and financial services closing physical branches and large parts of the population unable to leave their homes, organisations are hoping to utilise digitalised identities – but the fact there are no industry standards or protocols is causing concerns.

“We’ve always been quite competitive and this is a whole new world for us, and open banking is opening that up to us,” said Charlotte Sadd, personal banking strategy and innovation manager, NatWest during a panel at the Open Banking World Congress this week. “I think the collaboration piece is massive and this is not necessarily about technology – this is about how we work together and how we create [digital identity] outside of the technology.”

In order for banks to incorporate digital identities within an open banking context, they must trust other institutions to handle customer data properly, she said.

“Getting [a network] in place so that our customers are confident that when they use that digital ID with us or someone else, they’re in a trusted, safe and secure network is one of the main components for us.”

Some market participants believe one UK-wide identity scheme should be the goal.

“I think we really need a single identity scheme which enables trust and delivers authentication, and this would streamline the consent model that would be used through open finance and I think very much drive efficiency in the market,” said panellist Harry Weber-Brown, digital innovation director, the Investing and Saving Alliance.

But others think several schemes are possible and more likely to appear in the UK where digital identity hasn’t seen a regulatory-led approach. According to Emma Lindley, managing director at AiiD Global and co-founder, Women in Identity the UK can expect to see up to five different digital identity schemes appear in the next few years.

“There are multiple [payment] schemes but you need to make sure they are interoperable. I think the key thing is there needs to be some kind of target operating model, there needs to be a legal framework in identity,” she said.

“The private sector is going to want to know how they’re going to save money or make money, because that’s how the private sector works. Understanding who is actually going to fund some sort of scheme, how money’s going to be saved, how money’s going to be made – I think we need to work out what the use cases are.”

Gareth Narinesingh, commercial director, financial services at digital ID provider Yoti, said a broad spectrum standard is necessary for full scale adoption of digital ID, but the  government must provide guidance.

“Unfortunately if we are looking to the private sector to lead this – and there are dozens of players out there, digital identity is a very competitive space globally and each ID provider does things in a very different way – as a consequence of the private sector leading this we may end up with lots of different ways of doing things, which is a little counterintuitive to interoperability sadly,” he said.

According to research by consumer ID provider Nomidio obtained by bobsguide, of the one in seven UK adults who have had to confirm their identity digitally during lockdown 49 percent were asked to email sensitive documents such as passports. The firm predicts a surge in identity related fraud as a result.

“Coronavirus is a great example of one of the macro things that have happened that have really shone a light on some of the issues we have across the board – across the government, across the public sector and why digital identity is so important,” said Lindley.

Resources

Revenue Management: How Banks Can Create Streamlined Processes and Provide Value

Other | Banking Revenue Management: How Banks Can Create Streamlined Processes and Provide Value

SunTec Business Solutions

Revenue Management: How Banks Can Create Streamlined Processes and Provide Value

Revenue management is a crucial process for banks. From customer onboarding to deal evaluation and designing new deals, there are… Continue Reading

View resource
Increasing Costs of Cyber Insurance

Brochure / Fact Sheet | Cybersecurity Increasing Costs of Cyber Insurance

NXTsoft

Increasing Costs of Cyber Insurance

The cost of cyber insurance is increasing significantly in part to providers who don’t think organizations are taking steps necessary… Continue Reading

View resource
NXTsoft Experiences Over 5x Increase in CECL Sales in 2021

Best Practice | Accounting NXTsoft Experiences Over 5x Increase in CECL Sales in 2021

NXTsoft

NXTsoft Experiences Over 5x Increase in CECL Sales in 2021

NXTsoft, a company focused on providing API connectivity, data analytics & data conversion solutions to financial institutions and Fintech companies,… Continue Reading

View resource
Acumen.plus | The complete STP Treasury platform.

Other | Treasury Acumen.plus | The complete STP Treasury platform.

Profile Software

Acumen.plus | The complete STP Treasury platform.

Acumen.plus is an open cloud-native platform for the whole spectrum of Treasury and Capital Markets operations in real-time. It supports… Continue Reading

View resource