By Chris Pickles, Head of Industry Initiatives, BT Global Banking & Financial Markets
Two major items of US legislation have a global impact on firms — the Dodd-Frank Act and the Foreign Account Tax Compliance Act (FATCA). At a meeting last week in New York led by departments of several national governments and market regulators, I asked if they would be using the same unique identifier for the same targeted organisation when implementing both acts.
The response was a blank look.
Dodd-Frank requires financial institutions to be able to identify uniquely their clients and counterparties so that regulators can see which firms have taken on excessive or dangerous risks in the market.
FATCA requires the same financial institutions to identify uniquely their clients and counterparties so that US tax authorities can see which firms owe them tax money.
You might think that the same government might use the same system of unique identifiers across all new and forthcoming legislation — but you’re probably an optimist.
Instead, it looks more likely that governments will go for ‘federated’ identity approaches so that their customers can have a simple approach to accessing the multiplicity of on-line services that each government now makes available.
And as well as recognising the breadth of identities that individuals and legal entities must use to access government services, governments are also recognising the market for identities that exists in the real world. The UK Government made announcements to this effect in June.
All of this shows that it’s time for firms to consider how they themselves should approach identity management for the future.
Some firms have a ‘single sign-on’ approach for accessing internal services; some firms try to convince themselves that they already have it by ignoring how many different sign-ons their employees really have to deal with.
But now we are looking towards a future with single sign-on to external services — the brave new world.