Comment: Government's digital upgrade could co-opt banks

The work carried out by Australia's banking sector to comply with regulations such as the Know Your Customer rules and the various iterations of the anti-money laundering and counterterrorism financing laws may well be put to a very practical use by the Federal government - if and when it gets its grand plan for digital transformation of all government departments underway.

David Hazlehurst, acting chief executive officer of the interim Digital Transformation Office, speaking at the major technology expo CeBIT in Sydney yesterday, slipped in a surprise thought bubble towards the end of his presentation on the government's agenda.

Hazlehurst introduced the concept under the heading of "contestability"  (in other words, ways in which sectors other than the government could take on some of its tasks) and said: "The government's plan is that [tasks] like authentication ought not only be provided by government; [services] like digital mail ought not only be provided by the government and you can imagine a world, for example, where logging into your bank is your access to government services and perhaps you get your digital mail on your bank website."

No other details were outlined, so the agenda clearly needs further work. However, the banking sector would certainly have greater running costs and compliance burdens placed on it - not to mention a raft of risks, ranging from breach of privacy to detection of fraud - if this became a key plank in the government's plans, rather than one of several "nice to have" ideas.