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Four of Australia’s largest banks have put their support behind a new national digital identity infrastructure known as ConnectID.
ANZ, Westpac, Commonwealth Bank (CBA) and National Australia Bank (NAB) have each announced plans to introduce ConnectID, a new scheme that is set to begin national trials this year and launch in 2023.
Developed by Australian Payments Plus (AP+), ConnectID aims to provide an “identity hub” for Australia’s digital economy by routing all identity transactions through its single network.
By doing so, ConnectID will aim to protect customer privacy and drive productivity in the digital economy.
As an open, standards-based infrastructure, ConnectID users will be able to verify themselves online through organisations that they are already customers of, such as banks.
Although ConnectID facilitates data exchange between identity providers, it does not see or store that data.
Instead, identity providers take responsibility for data storage, exchange and protection with the consent of the customer.
"This is a major milestone for Australia’s adoption of digital identity, aiming to securely and simply deliver a seamless online identity verification experience to solve real-world issues,” said Lynn Kraus, CEO of AP+.
“This includes proving your identity online for age verification, setting up mobile phone plans, employee onboarding, travel bookings, loan applications and can even extend through to insurance payouts.”
Beyond banks, ConnectID is also working with governments, businesses and online merchants to further integrate digital identity into Australia’s national payments infrastructure.
Similarly, it will pursue commercial applications in sectors such as telecoms, insurance, utilities, transport, real estate, not-for-profit, start-ups and fintech.
“We are pleased to help our customers have more control of their data and privacy, enabling them to share their personal information with approved merchants, backed by the security of the CommBank app,” said Katherine Sleeth, general manager of open data at CBA.
“The quick online process will save customers time and help keep them safe online.”
A collaborative effort
Launched in September 2021 following approval from the Australian Competition and Consumer Commission (ACCC), AP+ is a new organisation formed by the merger of domestic payment scheme companies eftpos, BPAY Group and NPP Australia.
In a press statement, AP+ said ConnectID represents the coming together of each organisation’s previous digital ID initiatives.
eftpos, better known as Australia’s low-cost domestic card alternative to Visa Debit and Debit Mastercard, will provide the underlying network for ConnectID.
“eftpos acts as the broker or middleman, connecting all identity requesters like financial services, online stores and government departments with every digital identity issuer in Australia,” eftpos said in a promotional video.
“Identity providers are able to offer an additional trust-based business service to their customers, and ConnectID enables each of them to talk to the others seamlessly.”
ConnectID is already accredited under the Australian Government’s Trusted Digital Identity Framework (TDIF), a set of rules and standards for all providers and services related to digital identity.
In March this year, eftpos submitted the first application by a non-government entity to operate a TDIF-accredited digital identity exchange through ConnectID.
This followed ConnectID’s first state-wide trial in late 2021, in partnership with the Queensland government, fintech firm Meeco and blockchain developer Hedera Hashgraph, whose distributed ledger technology handled the registration and verification of credential records.
Interoperability
AP+ said ConnectID is designed to be interoperable with other identity and credential-related services provided by the government under the TDIF.
It also aims to be interoperable with financial industry privacy and security frameworks and other distributed digital identity credentials.
Such measures are believed to have the potential to open up untapped value in Australia’s digital economy.
According to a 2019 study by McKinsey, digital identity in mature economies such as Australia could unlock economic value equivalent to 3 percent of GDP in 2030.
AP+ believes that the participation of some of Australia’s largest banks will provide the scale and trust needed to drive widespread consumer and business adoption.
“In Australia, there is a real need to facilitate identity verification methods to reduce costs and enhance compliance outcomes for businesses,” said Kraus.
“This will help reduce hassle and instances of fraud and identity theft, while improving the ‘digital trust’ between customers and vendors.”
Angela Mentis, chief digital, data and analytics officer at NAB, also said that ConnectID could serve as an important lynchpin for Australia’s digital economy.
“We think that digital identity will be the most crucial enabler of safe and secure interactions in our future economy, and are certain that customers can have trust in this solution,” she said.
