What we know so far about Labor’s Trust Exchange initiative

Minister for Government Services and the National Disability Insurance Scheme Bill Shorten is set to reveal the next step in the government’s move towards Digital Identification. Labor is calling it the Trust Exchange (TEx), and it is designed to give Australians more control over their personal data.

Minister Shorten will officially announce TEx at the National Press Club on Wednesday afternoon. The initiative promises significant changes to how data is handled for both consumers and businesses.

What is the Trust Exchange (TEx)

TEx is a system that allows individuals to verify their identities and credentials using official information already held in MyGov.

This process happens through a digital wallet on their phones, where users can control exactly what personal information is shared and with whom.

Instead of handing over physical documents like a driver’s license or passport, TEx users could simply scan a QR code or use technology similar to a tap-to-pay machine.

The system would then share only the necessary information, such as confirming age or identity, without revealing other personal details.

“You choose which information to share from your digital wallet and consent to its use,” Minister Shorten’s National Press Club speech reads.

Is the Trust Exchange the same as the Digital ID?

We’re still waiting on more information regarding TEx, but it does sound incredibly similar to the government’s Digital ID scheme, which it has been talking about for several years.

However, Minister Shorten confirmed in his speech that TeX will be built out as part of the Digital ID project.

Minister Shorten acknowledged the work Finance Minister Katy Gallagher has done on Digital ID. He also mentioned Assistant Treasurer Stephen Jones who he will be working with on the project.

“This is not duplicating Digital ID but is built upon the investments already made in that system, including all the consultation and the digital ID infrastructure” Minister Shorten said.

According to Minister Shorten, TEx will be a new and world-leading approach to digital ID infrastructure that will allegedly rival the General Data Protection Regulation in Europe “but without the regulation and complexity”.

“We’re opting for the carrot over the stick, as individuals, business and government all win from this,” Minister Shorten said.

“And where most other jurisdictions have a centralised ID with a number from birth… we’re embarking on the first federated model, which provides more privacy and security settings.”

The potential effects of the Trust Exchange on businesses

TEx is currently at the proof-of-concept stage, with $11.4 million being invested as part of Digital ID. So it’s difficult to definitely say how it will affect businesses, but there are some possibilities.

Enhanced data security

One of the primary benefits of TEx is enhanced security.

Businesses could verify customers’ identities without needing to store sensitive personal information. This could reduce the risk of data breaches — a significant concern for big businesses and SMEs alike, particularly with data breaches and cybersecurity incidents on the rise.

This could be particularly beneficial for smaller businesses with limited cybersecurity resources.

One example given was the need to show proof of age at a club.

“…they’d just hold their phone up to a QR code or tap-to-pay machine and a digital token will be sent to the club vouching for their identity, address and age. None of that information needs to be kept by the club,” Minister Shorten said.

“All that has been exchanged has been a digital ‘thumbs up’ from the Government that you are who you say you are.”

Streamlined operations

TEx could streamline operations in areas such as onboarding or age verification.

For instance, when hiring new employees, businesses could use the platform to verify identity and qualifications, reducing admin burdens and speeding up processes.

“With TEx, instead of having to send copies of all those credentials… you would be able to choose ‘verify my identity’ via myGov or with the Government Digital ID,” Minister Shorten said.

“You then consent, via your digital wallet, to share attributes of your identity with the new employer – but only the ones you agree to. It could be date of birth, address, citizenship or visa status, or qualifications, occupational licences, or working with children check.”

Improved customer trust

Offering a secure, privacy-focused method of verification could also enhance customer trust. By allowing customers to control what information is shared, businesses can position themselves as privacy-conscious, potentially strengthening customer relationships.

“Whatever the case, online or in person, you choose what is shared, you consent to it being shared and you can trust it is safe,” Minister Shorten said.

Are there any concerns around the Trust Exchange?

Seeing as it is only being announced today, time will tell on that one. But in general, there are some things to consider.

Firstly, its success will depend entirely on widespread adoption and integration with existing technologies.

This will take time and potentially resources as well. Businesses may be required to invest in new tools and training.

Trust will also be a major factor. Australia’s track record with digital systems hasn’t been great.

The results of Robodebt, as well as the rushed rollout of My Health Record despite privacy concerns are valid points of wariness.

Looking at the current government, scammers got away with over $500 million in an ATO fraud due to a flaw in the MyGov system.

So while a centralised point of identification, particularly one that promises enhanced privacy, is enticing – it also exposes people’s personal information to a single, centralised point of failure.

That’s something the government will need to be damn sure it gets right so we don’t end up in an even more catastrophic data breach than what we saw from the likes of Optus and Medibank in recent years.

Even the global Crowdstrike outage showed just how badly things can go wrong when things are so closely interconnected.

With TeX set to launch by the end of the year, the government has some work on its hands to both get it right and convince Australians that our data is safe in its hands.

More to come.

Never miss a story: sign up to SmartCompany’s free daily newsletter and find our best stories on LinkedIn.