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Banks will be able to apply to join the expanded digital identity system within two years, following the passage of amendments to the Digital ID Bill.
The Digital ID Bill 2023 has officially passed through Parliament, after amendments were agreed to in Senate on Wednesday (27 March).
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The bill seeks to modernise Australia’s Digital ID arrangements by legislating an economy-wide Digital ID Accreditation Scheme and brings in additional security requirements and restrictions on data collection.
It aims to help reduce identity theft and fraud by resulting in an Australian government Digital ID System that state and territory governments and the private sector can choose to participate in. This would likely see broader uptake of Digital ID for uses such as opening bank accounts and applying for mortgages.
Following on from a period of consultation (which saw commercial broker David Gandolfo, the patron and chair of advocacy for the Commercial and Asset Finance Brokers Association of Australia Limited [CAFBA] appointed to the advisory stakeholder group to represent the interests of small business and the finance sector on the draft Digital ID Bill), amendments have now been passed.
After pushback from private sector companies – including banks – the bill was amended to enable accredited private businesses to apply to join the Australian government Digital ID System within two years of commencement of the Act, among other technical changes that ensure people can still use paper documents should they so wish.
Noting the passage of the legislation through Senate, the Minister for Finance, senator Katy Gallagher, said: “The Albanese Government is making it easier, simpler and more secure for you to access government services online.”
The Australian Banking Association (ABA) also reacted to the news, stating that a voluntary nationwide Digital ID would be another important tool for banks to help protect the privacy of Australians and their data.
“This will be another layer of protection available to Australians in situations where they verify their identity online, including when they are interacting with a bank,” ABA chief executive Anna Bligh said.
“For those Australians who wish to use a Digital ID, they will have the potential to conveniently and safely open a bank account within seconds.
“More secure and efficient identity verification will also enable banks to prevent identity fraud and theft, protect individuals from scams and reduce other cyber security risks.
“When utilised, Digital ID will mean Australian companies won’t need to store as much, if any personal information, reducing the oversharing of personal data throughout the economy, reducing risk for Australians.
“Digital ID will also be another important weapon in the fight against scammers. It will make it more difficult for scammers to open false [bank] accounts with stolen or fake ID documents,” adding that it will add to the work that banks are doing to harden protections against scams through the new Scam Safe Accord.
Speaking in November last year – when the bill was first introduced into Senate – the Assistant Treasurer and Financial Services Minister Stephen Jones stated: “Whether it’s thwarting a scammer who is pretending to be your bank or securing your online tax accounts so criminals cannot access it. Digital ID will help secure [Australians’] money and their information.”
[Related: CAFBA patron selected for Digital ID stakeholder group]
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