National Australia Bank and Australia Post are poised to form a trust services joint venture aimed at shielding online merchants and shoppers from the threat of identity fraud.
The prospective joint venture partners have been collaborating on the initiative – known within both companies as the TrustCheck Project - since at least February when they commenced a search for an innovation specialist to lead the business.
Sources within the bank and AusPost confirmed to Banking Day that product development for the TrustCheck venture was now underway following the appointment of an “innovation business owner” in the last month.
Banking Day understands that the project is still at an early stage of development, with the focus on finalising product design and a proof of concept document. The project team is yet to finalise how the new service will be delivered to merchants and customers, with the proposed product tools said to be “evolving”.
According to a job description for the business owner role published in February on LinkedIn, the project team is expected to “develop a virtual business within both collaboration partners, for TrustCheck to become a sustainable and investable standalone business”.
The business owner is specifically tasked with commercialising the digital business by facilitating an agreement between the venture partners.
AusPost states in the job advertisement that the business owner would be required to:
“Build strong and strategic stakeholder relationships at Australia Post and NAB to enable TrustCheck to build a positive reputation and strong engagement across all required functional areas, particularly risk, legal, privacy, sales, governance, corporate development & partnerships, and data service owners.”
According to the LinkedIn advertisement, the head of TrustCheck’s project team reports to AusPost’s head of incubation who, in turn, reports to the corporation’s executive general manager of product and innovation, Ingo Bohlken.
As the country’s largest business bank, NAB is under pressure from peak retailer bodies such as the Australian Retailers Association to combat the online fraud problem, which has worsened materially since 2015.
Up to the end of April NAB had a service agreement in place with specialist online identity authentication services provider iSignthis Ltd but that relationship ended after the bank narrowed the types of merchants its service partner could engage with.
Commercialisation of a service such as TrustCheck would fill part of the void created by the loss of iSignthis’ expertise.
The TrustCheck Project is one of the first tangible industry efforts to address the rising problem of card not present (CNP) fraud in Australia.
CNP fraud occurs when the account details of a cardholder are stolen and then used to make purchases over the internet.
While the advent of chip-enabled credit and debit cards has reduced the incidence of skimming and counterfeit fraud, regulators, banks and law enforcement agencies have struggled to thwart online fraudsters in the last decade.
According to the Australian Payments Network, CNP fraud accounted for 85 per cent of all fraud committed on debit and credit cards in the 12 months to the end of June 2018. There were around 3.3 million fraudulent online transactions using the details of Australian issued cards last year, which were worth $478 million.
In the 2015 financial year there were 1.48 million fraudulent online transactions perpetrated against cardholders worth $323 million.
AusPost’s innovation programs are widely acknowledged among the most successful in Australian industry.
The corporation has benefited from its participation in the University of Melbourne’s award-winning Accelerator Program, which since 2015 has been ranked in the top ten university-based startup incubators i