Banks Can Be Key Players in Delivering Secure Digital Identity Solutions

LONDON – Banks can help deliver a secure digital identity solution for all of their customers’ online interactions. However, they have a closing window to decide the role they will play.

This is according to a new report “Digital Trust: How Banks Can Secure our Digital Identity,” by the International Banking Federation (IBFed) and global management consulting firm Oliver Wyman. It estimates that with $40 USD per digital identity user per year, digital identity could present a $150bn revenue opportunity.  This is based on the number of people who access internet via mobile globally.

Global consumers have over 500 interactions a year on average that can be secured by digital identity. These range from booking flights, to voting, to opening a bank account or buying a house. Digital identity will make these interactions more seamless, as well as secure.

While basic digital identity schemes have emerged in some countries and are expected to be in place in most markets in the next 2-5 years, there is a question about who will own and operate the infrastructure required by digital identity – governments, banks, telco, payment providers or big tech. There is much left to be determined around who pays, data privacy, user sovereignty, governance, and global interoperability.

The report shows that banks are in a good position to provide digital identity schemes that protect consumers, as highly regulated institutions with experience protecting personal data and mitigating its use by criminals. It outlines how banks now need to decide what part to play in the evolving digital identity ecosystem: what role to adopt, what use cases to pursue, decisions on technology investment, collaboration and governance, and agreeing timelines.

Ted Moynihan, Partner and Global Head of Industries at Oliver Wyman, said: “The shift to digital identity is occurring in most countries and will have far-reaching implications. If banks are to maintain their relevance in the digital world, it is essential that they play a key role in this transformation.”

Rob Nichols, President and CEO of the American Bankers Association and the current IBFed Chairman, said: “Digital identity is likely to have profound effects on the global marketplace and raise important questions around privacy, financial inclusion, and the appropriate role of government. We hope this report serves as the starting point for a robust discussion about the future of this important space.”

To find out more about the joint report, please click here.

About International Banking Federation (IBFed) (www.ibfed.org )

The International Banking Federation (IBFed) was formed in 2004 to represent the combined views of our national banking associations. The IBFed collectively represents more than 18,000 banks, including more than two thirds of the largest 1000 banks in the world. IBFed member banks play a crucial role in supporting and promoting economic growth by managing worldwide assets of over 75 trillion Euros, by extending consumer and business credit of over 40 trillion Euros across the globe, and by collectively employing over 6 million people. The IBFed represents every major financial centre and members’ activities take place globally. This worldwide reach enables the IBFed to function as a key international forum for considering regulatory and other issues of interest to the global banking industry.

About Oliver Wyman

Oliver Wyman is a global leader in management consulting. With offices in 60 cities across 29 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 5,000 professionals around the world who work with clients to optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a business of Marsh McLennan [NYSE: MMC]. For more information, visit www.oliverwyman.com. Follow Oliver Wyman on Twitter @OliverWyman.