The view from Sibos: Banks in danger of letting digital identity opportunity pass them by


As the haze descended on Singapore, banking delegates at the international Sibos conference were peering into the potential of digital identity as a source of new revenues.

Digital identity is, “the bank’s opportunity to lose”, noted Barclays Bank’s chief data officer, Usama Fayyed, during a well-attended panel session on Tuesday where he pushed banks to innovate faster and seize the day.

Fayyed and other panellists, including Sean Gilchrist, managing director, commercial digital from Lloyds Bank, identified established social networks and technology vendors as the most probable sources of competition. The spectre of the threat from Apple, Facebook and Google was inevitably raised.

The fragmented nature of data protection law and creating a frictionless consumer experience were cited as significant barriers to overcome.

“Customers should trust organisations that have a vested interest in their privacy,” said Fayyed. “Banks are already in this business. If the alternatives to banks are funded by search and advertising, then inevitably they are conflicted.”

Using the analogy of the physical safekeeping of assets, Fayyed put forward the view that banks have retained a head start in terms of consumer trust. From this position the industry should, theoretically, be able to build new lines of business and explore different charging models for identity based services.

He added: “Banks are increasingly in a declining margin business. We need to find models where we have an advantage and can serve the customer. This is a good one.”

Despite this positive outlook, the panel agreed that no single form of identity verification would prevail. Government and healthcare were the other major verticals to be accommodated within a federated view of identity.

In March, Barclays was named among a list of nine companies applying to act as identity providers for UK consumers accessing Government services online.

Convenience to the user, to use manage, reconcile and authorise multiple forms of identity was identified as one of the key gating factors to consumer adoption.

Exceptions to this view might arise from the lower threshold of trust required by millennials in developed countries. Or in the developing world by the numbers of unbanked citizens whose first experiences of using financial services comes via mobile phone and a non-bank payment provider, rather than a traditional bank on-boarding process.

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