Dutch lead way in Digital Identity with new bank initiative and government target

The focus on digital identity continues with the Dutch banks announcing they will launch pilots for their new bank identification service starting at the beginning of 2016 and the Dutch government anouncing that by 2017 they “want it to be possible for all government transactions with citizens and businesses to be conducted electronically”. 

Bank system based on iDEAL service

The bank plan is that, after the pilots have established that the service is viable, consumers with an online banking account in Netherlands will be able to log into commercial and government service providers’ websites without the need of maintaining multiple accounts. 

The service is based on the user experience and technology of the popular Dutch payment product “iDEAL” which processed 100m payments in the first half of 2015. The service will offer two main services:

• allow identification and authentication of a consumer based on credentials issued by a consumer bank
• provide verified personal attributes of an authenticated consumer from the bank’s administration

This is a big deal because:

• almost every consumer in Netherlands has access to online banking which makes it instantly attractive for commercial and government service providers
• for consumers, in addition to maintaining just a single set of credentials instead of having your credentials scattered amongst several parties
• the new service will mean that consumers do not have to fill out forms required to sign up for an account even if a consumer has never visited a website before he will be able to login instantly
• decreased Customer Due Dilligence (CDD) and (credit) risk assessment costs because  persons can be identified and authenticated with a high level of assurance, there is no (or at least less) need for additional checking of information with risk- or credit databases.

The pilots will be with an insurance company and the Dutch tax authority.

The banks are understood to be hoping that the new service will adopted by whole online community in Netherlands, and that the reach and level of assurance that it can provide, could form a valuable addition to the Dutch government’s Idensys scheme.

Dutch Government’s Idensys Scheme (formally known as eID)

By 2017, the Dutch government wants it to be possible for all government transactions with citizens and businesses to be conducted electronically. On their web-site, they write, “Idensys helps to achieve this ambition by making life easier for public organisations in terms of safe and user-friendly access to digital services. Idensys enables people and organisations to conduct business online with the government and the business world, using one or more login sources. This means that Idensys will become the standard for access to digital services and the exchange of personal information.”

The government explain, “The reasons for developing Idensys are:

• public and private organisations need (more) secure electronic services; 
• public and private organisations wish to create a fall-back option should a login facility fail;
• framework would enable users to reduce the size of their set of digital keys. They can chose which eID token they wish to use to conduct business online;
• the need for eID tokens that can be recognised at European level.”

About the Idensys Programme

The Dutch governement go on to say, “Idensys will be developed under the eID programme. The objective of the programme is to explore all possibilities in terms of introducing an eID Scheme, performing the preparatory work in relation to the decision-making and getting the relevant public and private parties on board. The programme is a partnership between the government, the market and science. The Ministries of the Interior and Kingdom Relations and Economic Affairs have commissioned the programme.”

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CTMfile take: The iDEAL based digital identity service is important example of what can be done today. However, the huge difficulties that the banks have in leading Digital Identity programes is shown by fact that the Dutch government did not even mention the banks in their list of partners. Barclays Bank’s chief data officer, Usama Fayyed is right when he said at SIBOS in Singapore that, “Digital identity is, “the bank’s opportunity to lose”. So is BofA Merrill’s Leavenworth who believes that, “the key differentiator (for banks) is around identity.” But will they be able to use it?