Governor of the Reserve Bank of Australia says the digital ID ecosystem is too fragmented
Philip Lowe, the Governor of the Reserve Bank of Australia (RBA), has described the country’s digital identity system as “fragmented and siloed” resulting in a proliferation of identity credentials and passwords. “This gives rise to security vulnerabilities and creates significant inconvenience and inefficiencies, which can undermine development of the digital economy,” Lowe told the Australian Payments Network Summit, according to a report by ZDNet. “These generate compliance risks and other costs for financial institutions, so it is strongly in their interests to make progress here. It is fair to say that a number of other countries are well ahead of us in this area.”
Lowe believes a strong digital identity system, encompassing competing, but interoperable services, would open up new areas of digital commerce and help reduce online payments fraud, building trust. He also called on the nation’s financial institutions to realise the full potential of the New Payments Platform (NPP), which enables users to send each other money in near real-time, using an email address or phone number. Since it went live almost two years ago, approximately 66 million Australian bank accounts have been enabled to make and receive NPP payments, while 3.8 million PayIDs having been registered to date, according to the ZDNet report.
Meanwhile in Australia, Mastercard has begun testing a new digital service that it hopes will be able to verify a person’s identity immediately, safely and securely in both the digital and the physical world. It is running two separate pilots with Australia Post and Deakin University. Mastercard said the service employs a “distributed model that blends information stored on an individual’s mobile device and verified by additional reference points, such as an individual’s bank or participating government agencies.” It eliminates the need for a centralised identity database, the company added.