The Age of Consent – The Case for Federated Bank ID

Treasury and Trade Solutions 6 Expert Perspectives There is a broad consensus that digital ID is foundational to the full development of digital commerce. Banks are well positioned to unlock this potential, if they can work together to build federated schemes, with the support of governments. Thomas Egner, Secretary General, Euro Banking Association Digital consent management lies at the heart of any possible solution for a number of challenges, including improvements in data accessibility. This is in line with the objectives of PSD2 and GDPR to enhance the control of businesses and individuals over their data through the right to provide (or withdraw) consent to allow authorised third parties to access their personal and business information. Standardisation of digital consent at a pan-European level would make it easier for businesses and individual customers to mandate their banks and/or other service providers to obtain and use business data held by other parties to innovate their services for the benefit of the customer. On top of this, digital identity is also a key enabler of automation in Internet of Things ecosystems. Banks traditionally play a role in the value exchange because of their trusted and regulated position. As data exchange is increasingly fraught with operational complexity and liabilities, banks could leverage this trust to play a crucial role in such consent transactions. In its thought leadership work, the Euro Banking Association continues to touch upon the topic of digital consent management. 11 Imran Gulamhuseinwala OBE, Implementation Trustee, Open Banking Implementation Entity Open banking should be thought of as just one instance of a more general principle enshrined in GDPR — data belongs to the individual and not to the institution or corporation. In the UK, we have implemented a scheme to enable individuals to safely access their banking data and take advantage of a growing wave of incredible innovation and competition. GDPR’s principle of data portability applies to all financial services products and indeed to all sectors of the economy. If we can build security and consent into the heart of an “Open Data” digital economy, we can create markets that serve consumers and businesses of all sizes. To do this, sectors need mechanisms for users to easily authenticate and consent. Through open banking we have created a federated authentication and consent mechanism covering 95%+ of the UK market, but there is always scope for more industry collaboration as we have seen in the Nordic countries. It is time to think seriously about how a federated Bank ID could become a foundation stone of the UK’s digital economy. David G.W. Birch, Director, Consult Hyperion A “Financial Services Passport” could be transformational for banks and the wider economy. For banks that already spend around 5% of their revenue on compliance, it would reduce the costs of customer due diligence (CDD) across the industry. Globally, banks spend more than USD100 billion on compliance. The wasted human capital is as much of an issue as the wasted money. A Bank ID would create a new service category and provide the opportunity to turn the sunk costs of CDD into an income stream. Bank ID could be used when renting a house, buying a mobile phone or choosing a new accountant. The bank earns a new income stream from the “relying party”, while the burden of CDD would be removed from a large swathe of economic actors. There is no reason to build the kind of national ID scheme that Anglo-Saxon countries find politically repellent — a federated scheme has been shown to work well and deliver not only a rational solution to the problems of banks, but also an essential utility that will benefit every digital economic actor, including machines! Oscar Berglund, CEO, Trustly Convenient authentication is a crucial component to unlock the value of open banking. Mobile Bank ID has been hugely successful in Sweden due to two factors. Firstly, its decoupled design, meaning that it is not embedded in the online banking interface but it is instead a standalone