How customers can benefit from digital ID

Welcome to NAP Digital Next. We've talked digital identity a number of times here and we're picking up that topic again today on the occasion of a very significant milestone in the Australian market. I'm Brad Carr and our guest today is Andrew Black, managing director of Connect ID, the service launched by NAB and other major Australian banks via the Australian payments plus network. Andrew and I are recording today at NAB's Melbourne office on the lands of the Warrungery people. Andrew, welcome and thank you for joining us. Thanks for having me, brother. Really, really great. It's a fantastic occasion to connect ID's first birthday and really glad to all of you pick this up together. We've had some of the great international luminaries on NAB Digital Next. We've had the CEO of Norway's World Leading Bank ID, even Westie Brickie, Jonny Brennan, the CEO of Canada's Diate Consortia. UK expert David Birch has been with us a couple of times and we really have sought to learn from the best around the world. And while I do encourage our listeners to jump into that back catalog, we also have some great progress here in Australia that we can all be really proud of. And we may be able to start with Connect ID. What it is, and I've talked a lot about it, but let's get it from the actual source. How do you describe what Connect ID is and what it can and will do for the Australian economy? Yeah, fantastic, brother. I think the, I mean, I just with the context actually just of what EP Plus is as well. I think it sort of helps frame what Connect ID sort of has become and, you know, many will have heard of EP Plus but probably more haven't. JPM Plus is fairly new in this trillion sort of business landscape and we came together three years ago, bringing together F-POS, BPAY, PAY2, PID and BIM digital payments wallet. And I think that's important context because we've been running the domestic payment infrastructure for 30 plus years in different incarnations. And that's what Connect ID, you know, really is looking to replicate for data and for trust. So we're a digital trust network that are core, which is the first for Australia. So we're very proud of and one year into that journey. And really fundamentally, we allow individuals to reuse an existing source and existing partner who already knows something about them, their identity, to verify themselves when transacting or buying new products and services really starting to move away from having to take photographs or take photographs of passport, striving licenses, documents and upload an email across the internet. The benefits we've sort of seen already in the market and industry are probably three pronged, you know, for businesses, for individuals and then for the wider economy, for individuals that real kind of ability to limit the amount of data they have to share, given them more control, more trust over that, the information and more choice fundamentally as well. I'm sure something will get, you know, into more but also helping protect them against fraud, fundamentally as well. Really important things that we'll delve into a bit further, absolutely. For businesses, what we're seeing, certainly the kind of core driver is still being able to verify their customers and getting that information and enough information, but exactly that, just enough and not having to store extra unnecessary amounts of data. So not having to store the photo copy, not having to store the unnecessary data that comes on a digital license or passport and really reducing their risk footprint and profile fundamentally. And if the economy at whole, you know, we see huge opportunities not only to reduce fraud scams, cyber breaches is something that's unfortunately very topical and has been in Australia for the last four or five years. I think two or three Aussies have been impacted by one of those. So it's something that's the forefront of the entire country's mind of how do you reduce the impact and the threat of that, but also this huge productivity and efficiency gains for the government and for the economy and sort of various studies have looked at that and the productivity benefits of sort of somewhere around 3% of GDP, you know, with a really strong robust digital identity system. So it's one where everyone wins, which is really exciting. Yeah, and I've related that a few times that from a nap perspective, we think of it a bit around, well, in my simplistic way, having two major sets of customers and that on one hand, you have the consumers exactly as you described Andrew, like people that have become increasingly aware as they've seen the the MediBank and Optus and Latitude experiences, increasingly conscious of how much of their data is shared and stored and potentially exposed to in different places. And then on the other hand, having businesses that exactly as you put it, increasingly conscious of the risk profile, the risk surface area that they're taking on when they take in and store this customer information. And it's a bit how, you know, I think Scott Farrell or he's used the term about data becoming perhaps the new Uranian. His firm Allison's at times has talked about it as being the newestbestus. And there is this notion, I think, this growing awareness of holding and storing this data is just creating added risk both for the consumer and for the business alike. It's so much better where we as a bank and the banking network across the Australian economy via AP Plus are able to actually essentially intervene and connect consumers and businesses, provide an attestation that just minimises the need to transfer any of that data. Yeah, absolutely. What are the perhaps the most valuable and also perhaps, you know, and all the most interesting use cases that you've seen? We need to be very use case focused and then that's very much the way that I want to approach innovation. But what have you seen where this can be best applied, helping Australian consumers and businesses? Yeah, it's been a really interesting turn over the first year and I think any time you do something new, you have a hope for what use cases will start to flourish and also there's some that you just don't expect that will pop up. The benefit and beauty of an organic marketplace. For me, I think the value piece comes into, you know, where's the really valuable for individuals? Were the key life moments that you're currently impacted by by having to share huge amounts of data? And the one that we've been really impressed with this year is the rental and sort of housing journey. It's one that is a lot of pressure on the Australian terms of the housing market and particularly in the rental market. You know, there's a lot of demand for properties in major cities and in that scenario, you often have individuals having to apply for 10, 20, you know, different properties before getting one. Now, that's a process that's very manual and paper based and sort of overburdened by sharing information, you know, when you're signing at least. But in a lot of cases, that's also being asked for when you're even just applying. So you could, you know, attend the 20 different times, you have in the shared documents and the sort of the fear of missing out of getting the property drives people to still continue to go, well, I don't really want to hand my passport over, but if it means I've got a better chance of getting this property, then I guess I will. So we've seen digital identity and connected with the banks, sort of, starting to make real inroads there of helping people still share that same amount of information, the same strong trusted identity, but with reducing massively the existential risk of storing, you know, far more, and I was doing quicker and safer. So, you know, it's one that we're excited to have some partners live with and it's a real high-value key life moment for individuals that is a real benefit for the community. Yeah, really topical and I think relates to a pretty significant pine point in the community at the moment. You've talked already a bit about safety, safety and security and I think, you know, we need to see those very important attributes against the, you know, I guess the prism of the fraud and scams epidemic that we really have through Australia and I think probably across the world at the moment, I saw some stats recently that suggested we were number two in the world for biggest fraud and scam exposure per capita, second only behind Singapore. I think this has probably become the crucial driver or the crucial source of urgency in this space. You know, I think probably five years ago and promoting the digital identity message at the time of the IAF in Washington, I was focusing probably on this as the secondary message at that time behind the, you know, how you look at our customer engagement works and where this sits in terms of the tech hyperscales. But I think really the opportunities to find new ways to show up and reduce those data exposures that end up feeding impersonation scams and social engineering. I think countering fraud and scams and trying to head off more of that at source has probably become the number one driver or imperative for why we need a good accessible digital ID service. Would you say the same one? Absolutely. I didn't know that's that actually. Australia being second and in sort of frauds and scams. I honestly were number one in cyber breaches. So we're always on the podium somewhere for good or for bad. I'm not sure if not the record we want. No, we were very pleased to perform so well on the Olympic telly this year, but this is not the one you want to win it. No, it's not a matter you don't have to, but it really is a scourge across the economy and it really is one of the sort of potentially defining arts of the era we're in in the digital economy. So it's critical we do something we do more and we do it together. And I think that's one of the, I never use the word benefit and fraud in the same sort of sentence, but somewhere where everybody collaborating only walks in everybody's favour. There's no competitive advantage really there. So that's why working closely with banks to provide these services together help combat, you know, those different types of fraud for businesses or individuals or scams or fraud. And just an example, I guess, in the in the Connected Eddie experience where you do use your bank to verify who you are to log in and sign up at that point in time, you're also getting the authentication of the bank, right? And we've seen, you know, one of those major vectors of fraud is that where there is a breach, the data is sort of linked onto the darknet is sold on and people then pick that up and can use that for account application fraud or takeover fraud. What we allow in Connected Eddie is a point of signing up for a rental property or perhaps even a bank account. You also get the authentication that comes with it as part of that login experience with the bank. what that means is it's not just saying that it is Andrew Black, it's Andrew Black at that point in time who's authorizing and consenting to do that. So that's sort of real time stop as a key a key part of where we think we can help. Yeah so it's a dynamic service, it's not a certain forget identity which you know probably some of the other initiatives elsewhere in the world might be. Exactly and then there's you know all the really good walk that sort of happens beneath the hood right so from from banks in particular who invest you know massive amounts and have incredible teams working on for security proactive and reactively as well. Yeah being able to share that information and share that sort of intelligence and the shared signals underneath where if someone in the network identifies something we can notify other parties. That's a really kind of important piece that we think will have a kind of long lasting impact and we're a network you know really wins out over anyone trying to do this individually. I mentioned I've been Westy Brookie of Norway's Bank ID in the introduction and yeah it is striking that if you look at the the online fraud rates these are verified stats around the world are typically in the three to four percent range of online commerce fraud three to four percent in most regions whereas for transactions that are made by Bank ID either in Norway or Sweden it's different in each of the two countries but it's around the mark of 0.004 percent. That's it's just Miniscule and it just shows what an impact that level of security has had as well as I think you know probably one of the exciting use cases that we'll get to in the near future will be the p2p verification and so that if I'm buying something from you on Facebook marketplace you know before I turn up with three my mates at your house to pick up a fridge or a couch that we've actually got a needs of actually verifying each other and having bank authentication to say right the other side is okay it needs to such a crucial piece that we can really bring to help the community. And is that sort of natural intersect as well between you know payments and identity as well right you know even getting access to to meta platforms and knowing your over 18 and knowing your real person as a as a challenge on its own let alone having confidence in the payment sort of method as a result so it's I think that's a entire sector almost as own matter of how we help reduce that yeah really kind of proliferation of scams on there. We've probably been in a kid moving although I did want to dwell on one other thing you said earlier and you I'm glad you started by explaining Australia payments plus because I think it is really important that when we look at the those success stories in places like Norway they readily call out that getting the the different parts of the banking industry to collaborate together was one of their really key success factors and now I do want to actually underscore that AP plus has a really important role here in being the place where we at NAB and the other banks that have launched this CBA now hands it as well of how we're able to come together but but maybe if we keep moving you know I often see that with great technical technical innovations the technology is often there and it takes longer for the the human adoption to come on board and I do feel that that's where we are in in digital ID in Australia and I do often hear people trying to sprout some new technological solution and I don't think that's the problem and I think now with the rails that we have via AP plus with Connect ID I think we actually have the technology what we actually need now is to be able to accelerate the human adoption and get more people comfortable with the solution curious in your thoughts whether whether you see it in a similar paradigm perhaps and then also you know whether there are things that stand out as to what we need to do to help drive that adoption and encourage people yeah absolutely and I think we have deliberately taken approaches and design principles when when bringing Connect ID together with with banks and partners to reuse existing technology the customers already use and know today right so that experience of logging into your bank logging in the same way you would today whether that's pin password or facial or biometric sort of login that existing experience is already familiar so we're trying to sort of help bridge that gap this is not a new app download it's not a new sign up it's not a new you know fancy thing to wrap your head around it's just using your existing banking experience to verify and log in but it's still a new journey right so people are very used to taping into an online I mean you call my estate the driving license number or taking a photograph of the driving license or a selfie to do that this is a little bit of a step change and well actually there's a better way to do this one of the challenges we've probably got here is is a misconception issue where adopting Connect ID is actually easier than you think yeah you know we sometimes hear people say oh how do I get a Connect ID and there's this notion of I assume that I've got to go and set up something new and it's actually you don't you're just using the fact that your bank already knows you the bank's already done the KYC you know check on you and so the bank can give an attestation on your behalf and we've probably got still got an ongoing education role in the community to help people understand it's simpler than you might imagine exactly and that's that word education so that's the the kind of core opportunity and challenge and focus area for the next year for us any research we do and we did some recently with a focus group around the use and the experience to make sure it is easy and intuitive I think 88% of people said they would happily use their bank and happily trust their bank as part of that experience and got it you know but it is still new we need to do that so what we're doing a lot of is how do you work with banks to help educate customers of when you see this connect ID button it means your bank's behind it you know as part of that experience and simple flow to do so and that's exactly it of the challenge and the the curve to help step over and really it is education for businesses for consumers for staff and for the population but there's certainly ready for it and and familiar with the journey it's a great point you might do are a 88% out of your focus group that were were comfortable and supportive of using your bank and I think it's consistent with what we see elsewhere in the world you know the the BIS study on American consumers the Bank of England study they've all shown consistently that most people have trusted their bank more than they trust government more than they trust tech firms with their personal ID data of course most doesn't mean all and there are differing views and different expectations in the community and I really come at it with the view that digital ID services will be better utilized if people have the choice trust to you choose and choose who you trust is the key mantra that we've espoused and that if people can use either NAB or WestPAC or services New South Wales or whoever they choose and they're able to validate themselves for all the services they need through their chosen front door and they may actually choose different ones at times if you you know don't want Medicare to know that you just bought alcohol for instance I think if we can do all of that then then people will use it whereas I feel that if we shoehorn people into a singular solution that they have to use it's probably going to be a bit more skepticism and more people are locked out and probably leave us all more exposed to the the fraudsters and the bad actors as a result. Oh exactly and yeah you've been a really strong proponent of choice and it really is a kind of core word for us you know that's why Connect AdE is not a thing you have it's a gateway to something you already use you know and with four banks on board you know it's broadly sort of 75% of the adult population Australia you can use it today which is great it's higher than any other solution in the market it is not 100% and our goal is not 100% our goal is 200% that's 300% right so you can choose in different use cases if you want to use you know Saras Victoria or NAB or another bank or you know federal government in the future as well that's that's the goal for us to be as inclusive and sort of wide-ranging as possible and I do want to be really unebiguously for our audience that I'm really proud of NABs role in stepping forward in in championing this cause and in being one of the the two banks that were there at the starting point in launching this but it is very much a service where we want all banks participating not all not only the majors we actually want the regional banks we want the foreign banks participating that the whole system is better and all of our customers and all in the Australian community are safer when more step forward and provide more choices for those in our community. We do want to take a moment I said at the outset it's the first birthday it's the anniversary of Connect ID yeah maybe could I ask you you know maybe a couple of things at once you know how do you consider the progress and where we're at the year in and and what would you like to see next you know how do we build on this this foundation as we're going to year two. Yeah it's been it's been a really exciting and great first year we're seeing really good growth and more importantly really good feedback from customers and from businesses you know once they see it and they get in their hands and they understand it they understand from a business point of view that oh I still get all the information I that need to to verify my customers but that the conversion is you know quicker that the the match rates are higher and that I store less data right that's a really compelling experience for businesses and we're seeing that sort of now land more and more and also great as you say to to get you know now I'm sort of for four major banks on board to to be joined in the experience and that sort of founding participation from NAB you know being a really strong lead in this space has been awesome over over the last year really that sort of leads into next year which is how do we continue to get this more into the hands of more and more sectors and news cases and today we're in the market with rental with employee on boarding with lending and e-commerce you know a variety of partners across those areas and next year we'll be into sort of telco insurance banking as well and a few others that are really exciting to sort of bring forth I think some of the other areas that we we have a kind of really exciting sort of horizon ahead of us for the next 12 months is how do we make sure that we're really doing what's good for society as part of this and and there's some use cases with you know fraud and scams we've touched on but some other areas that we're getting really good feedback from government around emergency relief payments you know and those sort of really kind of key moments and key pressure moments where perhaps you have to leave the home quickly for a natural disaster or or or the reasons we're actually grabbing documents just doesn't work right you do Gwyd i gwaithioedd o'r gwasio, mae'r gwasioedd yn gwaithioedd yn ymwyd. 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Coming up on Navdigital Next, we're going to pick up the series that I've previously foreshadowed on three big future trends on AI agents in the hands of customers, on the post-smart phone interface, and on quantum computing, which itself will have a big impact on the identity landscape in time to come. We also have a new Climate Transition Initiative that Nav has invested in, and also I think a very cool air filtration initiative launched by one of Nav's Adelaide-based customers that we're going to profile as well. So please join us again for those, and thanks for being with us on Navdigital Next.