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Chris Pickles

Chris Pickles

Chris Pickles - Picklesnet Ltd

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Identity Management a key topic for 2013

14 January 2013  |  3205 views  |  2

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.

TagsTrade executionPost-trade & ops

Comments: (3)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 16 January, 2013, 10:48

A few years ago, I was involved in the implementation of a leading Identity Management System at a Top 10 global FI. Apart from the one solution on which my company was working, we were aware of 4-5 more IdM systems in use at different SBUs and geographies of the FI. Therefore, when I read in this blog  post that there are hundreds or even thousands of IdM systems per firm, I searched for a definition of IdM and this is what I found on Wikipedia: "Identity management (IdM) describes the management of individual identities, their authentication, authorizationroles, and privileges". This confirms what I'd suspected, namely, IdM excludes identification of customers, counterparties and other entities, which I've known to fall under the purview of Customer Information File (CIF). Besides, this Wiki article lists fewer than 20 providers of IdM solutions. Therefore, I'm not sure if this blog post is expanding the scope of IdM to include CIF.

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Chris Pickles
Chris Pickles - Picklesnet Ltd - Waterlooville | 16 January, 2013, 11:16

Ketharaman - I think that it would be fair to call a system that manages identities an "identity management system". LEIs are for use by regulators as well, and the organisations that they regulate are not seen as their "customers" (other than in a "service-oriented government" way).

Best regards


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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 16 January, 2013, 13:41


There's no argument about the role of IdM in managing identities - in fact, by definition, they do that. However, my point was that, according to the classic view of IdM, they're not responsible for identifying entities. Besides, based on my personal knowledge and experience, I'm unable to come to terms with why a single firm would need hundreds, let alone thousands, of IdM systems. I admit that, with CIFs, it's a wholly different matter.

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I help organisations that work in the financial sector around the world to understand better how the sector works, how regulations impact the business operations of financial institutions, and how to...

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