Almost a decade ago, at the height of the Internet boom, I remember talking to a banker telling me that in the future, banks would not just keep your money safe, but also your identity. To some extent, this has materialized with identity protection programs offering insurance against the risk of identity theft. That said, if you view the identity as the collection of hard- or impossible-to-obtain information about a person that uniquely distinguishes her from others, you would certainly admit that a big part of this information (in particular secrets such as passwords) are spread around in a variety of online services (60 on average, growing to 200 according to a Yankee report on OpenID).
OpenID, as everyone knows, is the open solution to this problem, and banks seem to be excellent potential OpenID providers for the following reasons:
- “He who can do more can do less”. Password strength requirements and password strength user incentives are not equal among online services, but online banking is probably one of the services where password strength is highest, simply because this is where for most people the loss would be the highest if their password was to fall in the wrong hands. So, users won’t use an easy-to-remember Gmail username/password or blog commenting account to login at their bank, even if the bank trusts Google’s security, but they would probably not mind the reverse.
- Existing security-related assets:
- Banks already have the security infrastructure in place to secure financial accounts,
- Most banks are already trusted brands in terms of security, and
- Banks already have identity theft protection program in place that would complement OpenID, which is just a technology
- Banks are required by anti-money laundering laws to know their customer, and have probably more identity-related information about their customers (ex. government-issued documents) than any other online service. This means they have the widest range of authentication options, allowing them to support multiple levels of authentications. They are not constrained to a public URL/private password model: they can not only decide to issue a OpenID URL that is distinct from the existing username, but also use multi-factor authentication for instance by sending a PIN by SMS to a phone or requesting the user to click and get a call from a call center agent, as requested by OpenID policy extensions.
- Last but not least, compelling business reasons. A highly secure OpenID would be:
- A value-add service that the bank could charge a premium fee for
- A great way for banks to promote their brands (you’d see their logo everytime you authenticate), get to know their customers’ online usage patterns (which service you are using and when) and present new offers/ads (banking-related or not),
- A great way to retain customers.