Federal Budget 2024 and Digital Identity

The Australian Federal Govt has committed $288.1 million over 4 years starting 2024-25 to improve, implement and execute its Digital Identity scheme.  The scheme will increase security, streamline process and empower consumers who want to control how their personal data is being utilised. The financial services industry will be positively impacted by this project over the next 5 years with significant change predicted.

Federal Minister for Finance Katy Gallagher and the Federal Govt have initiated the implementation of the Digital ID Scheme. The purpose of this scheme is to minimise information held by businesses of Australian’s residents and citizens alike. $288.1 million has been set aside for a roll out over 4 years and beginning 2024-25. 

Funding will support:

  • The ATO will lead the program with 156 million to enhance MyGovID and will be renamed to MyID to prevent confusion
  • $23.4 million is earmarked for encryption enhancement across myGovID and myID.
  • The Australian Treasury and Australian Security Intelligence Organisation will establish new data standards and conduct security assessments
  • Services Australia will manage the scheme and upgrade its identity exchange for secure transactions moving forward.
  • Regulatory oversight will fall to the Australian Information Commissioner and Dept of Finance
  • $11million has been dedicated to support the development of smartphone apps to alert Australia’s residents and citizens of identity theft attempts

In June of 2023, there was a research paper of a National Strategy for Identity Resilience which was released by the Dept of Home Affairs National Strategy for Identity Resilience (homeaffairs.gov.au)

Signed by Senator the Hon Katy Gallagher Minister for Finance, Women and for the Public Services and the Hon Clare O’Neil MP, Minister for Home Affairs and Cyber Security

https://www.digitalidentity.gov.au

Digital ID Scheme – Impact to the Financial Services Industry

The Financial Services industry already have an obligation to identify and AML check their clients. A significant number of participants identify clients and save their clients identity documents on a local or network server creating a vulnerability and risk to their business.

Digital ID verification allows a financial services participant to:

  • Digitally identify their client
  • AML check their client (via PEPs and Sanctions list cross checks)
  • Avoid storing identity documents on within their IT environment
  • Avoid transmission of identity documents through unsafe means (email)

Digital ID verification is a lot safer for the financial services industry – both business participants and their clients. This is because identity documents are not stored or transmitted through unsecure means – generally email.

Australia and the Digital Economy – National Strategy for Identity Resilience

Australians have reported losing a staggering $33 billion to cyber crime up to the end of 2021. $1.8 billion was lost 2021 alone. 

Key findings of National Strategy for Identity Resilience by Dept of Home Affairs:

  • Principle 1- Seamless Commonwealth, state, and territory digital ID systems will support identity resilience
  • Principle 2- Identity needs to inclusive for all
  • Principle 3- Individuals, industry and government all have a role to play in identity resilience
  • Principle 4- All jurisdictions will work towars consistent high standars
  • Principle 5- Biometrics  establishment and verification of identity with consent can improve resilience
  • Principle 6- All jurisdictions will allow an individual to update information conveniently across agencies
  • Principle 7- Less data collection and retention
  • Principle 8- Clear data sharing arrangements
  • Principle 9- Consistent revocation and re-issuance
  • Principle 10- Clear accountability and liability

Only time will tell how closely the investment and principles will match the reality of the budget allocation in execution. 

Digital Identity Bill 2023

Digital ID is a secure and voluntary way to verify who you are online without having to repeatedly share personal information.

More than 10.5 million Australians have already created an account with the Fed Govt Digital System myGovID to access more than 130 government services.

The Digital ID Bill 2023 has put in place the legislative framework for phased expansion of the Government Digital ID system with Federal, state and territory jurisdictions within Australia.

National Strategy for Identity Resilience (homeaffairs.gov.au)

Short term strategy 12 months

  • Update of the National Identity Proofing Guidelines
  • Cohesive national approach for responding to identity security breaches’
  • Identity resilience education and awareness

Medium term 1-3 years

  • Credential protection register
  • Mobile ohone trust scores

Long Term 3-5 years

  • reissue of digital credentials through digital wallets
  • Identity remediation
  • Strong consistent commencement of identity records

Transitional bill and its focus

The Digital ID Bill is supported by the Transitional Bill, which aims to provide for a seamless transition from the current accreditation scheme and Australian Government Digital ID System to the new statutory framework set out in the Digital ID Bill.

The other key function of the Transitional Bill is to amend relevant Commonwealth legislation to ensure that the Digital ID Bill operates as intended.

Specifically, the Transitional Bill will amend the:

  • Privacy Act 1988 (Cth)
  • Taxation Administration Act 1953
  • Competition and Consumer Act 2010
  • Administrative Decisions (Judicial Review) Act 1977 (Cth)
  • Age Discrimination Act 2004; and
  • Australian Security Intelligence Organisation Act 1979

department_of_finance_-_senate_economics_committee_submission_di_bills.pdf (digitalidentity.gov.au)

The future of financial services identity verification

The funding made available via the Federal Budget 2024 for the Digital ID Bill has confirmed the governments intentions to move the economy to digital IDs.

To enable the verification of digital IDs and current physical IDs a financial services participant will need to partner with a Gateway Services Provider. This is a provider of an identity verification service connected directly into government services for the purpose of verifying identity documents (digital of physical).

We predict that there will not be many more Gateway Services provider approved by the government due to the large amount of change predicated in the next 5 years. This change will be driven by the Digital ID Scheme. As such there are only a small number of service providers that can provide a digital identity verification service to the financial services industry. Many financial services industry participants are protecting and future proofing their business by moving entirely to digital identity verification. Most platforms have already made this move.

One Click Verify: Digital Identity

One Click Verify are specialists in digital identity verification. We protect you and your clients.

Our software allows businesses to quickly and accurately verify customer information thanks to One Click Verify’s automation of the identity verification process. We can eliminate 99% of identity fraud and scam attempts and meet your KYC/AML requirements. To accommodate companies of all sizes, we provide flexible pricing options. One Click Verify can give you the tools you need to streamline your identity verification process and AML Program requirements and safeguard your most valuable assets, whether you run a small startup or a large corporation.

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