The Age of Consent – The Case for Federated Bank ID
Treasury and Trade Solutions 2 At a Glance • Privacy and data protection are the bedrock of a safe, effective digital economy. • The granting of digital consents and the usage of digital entitlements will be commonplace — friction needs to be removed and security increased. • Digital ID enables consumers and businesses to transact across a world of digital platforms, but identity is currently fragmented. • Fixing digital ID unlocks benefits in banking and beyond: for example, payments can be solved through digital ID combined with real-time payments rails. • Payments resolve into digital ID plus accounting entries plus rulebooks for dispute resolution. • Digital ID schemes in India and Sweden have transformed digital payments and led to wider societal benefits including digital government. • Banks have a natural role in the provision of digital ID, but they cannot go it alone. • Federated Bank ID schemes (based on government ID and other checks) leverage the enhanced due diligence that banks are required to perform on customers. • The Swedish Bank ID scheme provides a leading example that other countries should consider. • A Pan-European federated Bank ID scheme would help to complete the Single Market for digital money and solve issues with PSD2. • The “fiat currency stack” needs to be upgraded, built on the foundations of Bank ID and sound privacy and data protection legislation. • The combination of data protection legislation like GDPR, federated Bank ID, shared KYC registries, new payment rails and standardised Legal Entity Identifiers (LEI) will give a major boost to the soundness, safety and efficiency of internet commerce. • Technical answers are not sufficient — financial and digital literacy are critical if we are to reap the benefits of digitisation while avoiding the potential pitfalls.