Back to the Future of Federated Identity?

Ed Kountz | July 03, 2008, 11:21 AM

A JupiterResearch report slated for publication late this year will take a new look at the topic of Federated Identity services. Once the rage in online financial services, most banks eliminated their offerings in the early 2000s when consumer demand lagged expectations.

Given the limitations of Web 1.0, this was understandable…and until recently, Wells Fargo was the only major FI still offering federated identity solutions to a retail market. This week, however, it was reported that Citi will introduce a service enabling it to verify the digital identities of customers to third parties. While designed for commercial clients only at present, its’ clear that increasing utilization of the Internet for financial services (both retail and commercial) have brought into focus the Trust Gap that exists online. Even with advances in authentication on bank sites, “something the customer knows” remains the dominant way through which trusted access is verified. Other options—“something the customer has” (such as a smart card/ token) and “something the customer is” (a biometric identifier), are certainly seeing early, but generally less-well-established, adoption in the US.

Citi’s Managed Identity Services, will use PKI encryption to help secure payment and other sensitive files while on clients’ computer system, andto enhance after-the-fact auditability of data so encrypted. While designed for corporate clients, recent JupiterResearch reports (including LINK )
have touched on this Trust Gap from the e-commerce consumer’s perspective. Way too early to address the multi-sided buildout requirements necessary to declare success, but worth noting from my perspective as a step back into the complex digital identity management space.

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