Westpac has terminated its long-running Trust Centre project, which aimed to develop a commercial identity verification service for banks, credit brokers and online merchants, but will retain the project's intellectual property in-house rather than selling it.
The bank this week confirmed that it had axed any commercialisation plans for the service after it failed to win support from other Australian financial institutions, but said that it will retain all intellectual property associated with the project.
"The vision holds great promise but is not yet ready to become a reality," Westpac spokeswoman Jane Counsel said.
Trust Centre was based on a Swedish model known as BankID that allowed institutions and other businesses to verify a consumer's identity through a trusted third party outsourcer.
Locally the scheme was backed by former Westpac chief information officer Michael Coomer, digital industries entrepreneur Peter Fritz and former federal privacy commissioner Malcolm Crompton, who had promoted the scheme as a hub for identity verification services in the Asia-Pacific region.
Mr Coomer last month became the head of financial services for multinational outsourcer Electronic Data Systems, an appointment that took both his former employer and senior executives at EDS's largest Australian customer, the Commonwealth Bank, by surprise.
Five senior consultants associated with the project have also set up a new financial services security consulting firm, Carpadium, after their positions with Westpac were axed along with the project.
Carpadium director Andrew McDonald said while the new firm would deal with identity security and customer authentication technologies in the local banking market, it would not seek to resurrect the trust centre project.
"We have taken our skills and formed a new company," Mr McDonald said yesterday.
However, he said that the creation of a central identity escrow service remained a viable opportunity in Australia should institutions choose to work together to create one.
That now seems unlikely given the range of new security investments by large institutions, including SMS message authentication for online banking transactions and more sophisticated user behaviour profiling.
Most Australian banks, including Westpac and ANZ, have committed to the so-called chip-and-PIN (personal identification number) card standard that will see millions of Australians issued with smartcards through which they can do their banking.
One advantage of the smartcard standard is that online users of financial services are able to use an external card reader in combination with a computer to secure and encrypt online transactions before they exchange account number and passwords with their institutions.
The technology is regarded as superior to present online banking security because it makes it far more difficult to steal passwords through fraudulent websites and bogus emails that trick consumers into divulging sensitive details.
Most Australian retail banks have also started to offer substantial discounts for computer security software to their customers to better protect transactions, while online-only banks now issue security tokens that generate unique pass codes for free.
© Fairfax Business Media
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