Commonwealth Bank Activates Digital Identity Service

  Commonwealth Bank of Australia wiki

The Commonwealth Bank of Australia (CBA) has launched its digital identity service, allowing customers to use digital identity credentials to verify their identities. The move comes ahead of proposed legislation that aims to create a national digital identity ecosystem.

A Step Ahead of Government Regulation

The bank’s digital identity service enables verification through biometric facial scans for digital payments. This service launch comes as banks race to capitalize on the digital identity space before a widespread rollout is expected in the next two years.

The Australian government currently charges around $1 per successful verification through the Document Verification Scheme (DVS). Banks are now turning this regulatory expense into a revenue generation opportunity.

A Reaction to Government Delays

The CBA’s digital identity soft launch appears to be a response to the perceived slow pace of the federal government’s rollout of digital identity across Australia. This urgency has been amplified by significant customer data thefts at Optus, Medibank, and Latitude Financial.

Since 2018, the federal government has been encouraging private sector participation in its Trusted Digital Identity Framework (TDIF). Participants include Australia Post, Eftpos, OCR Labs, and Mastercard.

CBA’s Partnership with ConnectID

The CBA is promoting Eftpos’ ConnectID, a digital identity exchange accredited on TDIF, which does not issue digital identity credentials itself. Both CBA and the National Australia Bank (NAB) were announced as cornerstone customers of ConnectID last year.

CBA is also a major issuer for the global credit and debit card scheme, Mastercard. The US-based global scheme has quickly entered the digital identity space, aiming to increase transactions requiring proof of purchase to sustain and expand its interchange fees.

Concerns About PayID

The activation of ConnectID by CBA indicates support for Australia’s domestic payments ecosystem. This comes after the controversial merger of Eftpos, BPay, and the New Payments Platform to create Australian Payments Plus. The new platform also operates the PayID service, which has been criticised for its operational challenges.

NAB Follows Suit

Last year, NAB publicly supported ConnectID and recently activated the service on its website. This move follows the CBA and NAB’s announcement that they would implement ConnectID’s service to customers in 2023.

Struggles of the Digital Transformation Agency

The Digital Transformation Agency has faced challenges in creating a local ecosystem. Crucial enabling legislation has been delayed for years, and funding for digital identity is expected to run dry in 2024 unless replenished in May.

In light of recent mass data thefts, the Australian government has advocated for a national digital identity system. Home Affairs and Cybersecurity minister Clare O’Neil branded the data thefts as a “dog act,” and government services minister Bill Shorten has publicly supported a national digital identity system.