RealMe says StudyLink deal spurs uptake despite skinnier budget

Click the NBR Radio box for on-demand special feature audio: Personal Information Management’s Ross Hughson on RealMe

People wanting to use the Internal Affairs Department's RealMe login and identity verification service has been spurred on since the addition of student finance service StudyLink in May, although the agency is still trying to contain operating costs.

The service passed 93,000 verified users nine days ago, more than twice the 44,000 or so at the end of May, once students could use RealMe when applying for allowances and loans. It also gained when a user's identity could be authenticated at the same time as they renewed their passport,

Internal Affairs Department (DIA) manager of market and business development Tom Waldron told BusinessDesk the StudyLink tie-up means RealMe gets users at an early age and the agency hopes they will want to use it for other services later in life, such as when they're applying for a mortgage.

RealMe was rolled out in 2013 and has been part of the government's plan to make it easier for New Zealanders to complete transactions with the government online. Its target is for an average of 70% of the most common transactions to be done online by 2017, and is currently tracking at 40%.

So far it provides 66 services across 21 agencies, including lenders Bank of New Zealand, TSB Bank and Westpac Banking Corp, financial services firm NZ Forex and OMF, and software developer Secured Signing.

DIA wants to use RealMe as part of a broader IT initiative to build a platform enabling greater sharing of information in the department's other areas, such as citizenship, births, deaths and marriages, and the charity sector. That wider DIA plan appeared in the Treasury's June quarter monitoring list of major projects on affordability concerns, which advised the department to pause its ambitions while a review of RealMe was underway.

Mr Waldron stresses that RealMe itself isn't on the Treasury's watchlist, and that a review of its operating model is still being worked through.

"Like any other government agency initiative, we're always looking at determining the most efficient operating model, and obviously cost is going to be part of that," he says. "We're trying to minimise Crown investment while ensuring we're delivering good customer services."

The government says it will inject $12.5 million of new capital to keep developing RealMe over the next four years, while at the same scaling back funding for operational expenses

RealMe's operational funding is set to drop from $14 million mid next year to $6.5 million in the 2017/18 financial year and $2.4 million the following year, with the expectation it will start generating external revenue.

DIA's 2014 four-year forecasts show RealMe fees and charges generating $1.5 million at the end of June this year, rising to $12.1 million in 2018.

RealMe didn't hit short-term targets for the number of services available in the 2015 financial year due to delays in other agencies' projects and business cases, according to the DIA's annual report. That meant RealMe's $848,000 of revenue generated in the 12 months ended June 30 lagged behind the $1.6 million estimated.

To help drive revenue from the private sector, RealMe partnered with state-owned enterprise New Zealand Post several years ago.

(BusinessDesk)

RealMe not the only option, Ross Hughson says
Personal Information Management managing director Ross Hughson, who has a product similar to RealMe, says the problem for RealMe is New Zealanders don’t “wake up saying, ‘I need a digital ID.’” (Click the NBR Radio special audio feature, above right, for the full interview)

“I think there’s a bit of a catch 22 situation in terms of until there’s other services requiring or offering the verified identity service, you haven’t got any demand to do it,” the former Inland Revenue chief information officer says.

He says RealMe isn’t the only solution to all digital IDs. An ecosystem of providers would be more preferable and any organisation locking itself into one solution is taking the wrong approach.

“They should architect their systems to be able to take RealMe but also other services that verify customers,” he says.

(Additional reporting NBR staff)

(Click to enlarge, source: Department of Internal Affairs)