As an analyst, I’m more than well aware of the fact that federated identity management solutions are an opportunity waiting to happen, whether we’re talking the enterprise or consumer spaces. That’s why we’ve been bullish on Liberty for a while now.
But for the first time as a consumer, the need is hitting home. In conjunction with this Friday’s closing, I’m working to finalize the mortgage paperwork with my lender. Unfortunately there is no way currently to directly connect my lender with my financial institutions, meaning that the paperwork process involves me getting the request for information from a lender, (optionally) calling the financial institution for further information, manually printing out records, then eFaxing them to the lender. Every time they need something new, some more up-to-date record, it’s lather, rinse, repeat. I’m the bottleneck, in other words.
Not only is this process incovenient for me as a customer, it seems a process ripe for potential fraud [1]. While I might not have the Photoshop skills – or the motivation – to manufacture or doctor fake financial returns, there are unquestionably those out there that would. Treating paper returns obtained and delivered by users does not seem to take advantage of the possibilities that federated identity could provide.
By federating and authenticating our individual identities (mine as a customer and borrower, theirs as individual financial institutions), then allowing the two parties to communication – with my permission – directly, I could be transformed from a paperwork bottleneck into an authorization gateway. The net benefits would be a more efficient process, less hassle for me, and a (presumably) more secure transaction for the lender. The only one without an obvious gain would be my financial institutions, but there are opportunities there for a.) the service as a differentiator, b.) the service as an additional cost option or c.) a lower/neglible cost secured and authorized third party self-service.
It makes sense to me anyway, but maybe it’s just that I really, really don’t like all this paperwork. Either way it’d be great to see some positive strides made in the space after so many “identity theft” horror stories.
[1] An assumption born out by the fact that, at least for my lender, account history summaries are not considered as legitimate, while account statements are. This is not a problem unless – as I have – you have moved money mid-month, and real-time statements are not available.
