The old joke among standards specialists is “The financial sector loves standards – that’s why it has so many of them!” However, the same seems to apply to identity management systems within financial institutions.
We all know that the more complex a situation is, the more likely it is that things will go wrong - hence the engineering acronym “KISS” (Keep It Simple, Stupid!). One example of that is “information overload”, when you have so much information coming at
you simultaneously that you cannot process it all effectively and the likelihood of you making the wrong decision actually increases. A reaction to information overload can be to put up blinkers/blinders to stop all of that external information hitting you,
with the result that you create an information silo of your own.
A siloed approach also means that you don’t know what is happening in the rest of your organisation that perhaps you should know about. When financial markets were nose-diving to the bottom back in 2008, apparently some firms were offloading their risky
positions by selling them to counterparties that they too-late discovered were in fact another part of their own organisation - another example of someone trying to dig their way out of a situation and putting a shovel-load of problems right where they are
going to have to start digging next.
Large firms have many different departments and silos and many different systems for identifying their counterparties and clients - not just a few identity management systems but hundreds of them – and in the case of the largest financial institutions, several
thousand internal systems for identity management per firm.
It looks like 2013 is the right time for bringing to life a real global standard for identity management – the Global Legal Entity Identifier System.