The IRS could net savings reaching $305 million annually by implementing an improved identity management solution, according to a recent study from RTI International and the National Institute of Standards and Technology.
By instituting a solution aligned with the National Strategy for Trusted Identities in Cyberspace (NSTIC), the IRS could save an estimated $111 million up-front and $19 million annually in relation to a proprietary system. The National Strategy for Trusted Identities in Cyberspace champions an “Identity Ecosystem” in which organizations and individuals can use trusted identities for access to multiple services on the Internet.
This Identity Ecosystem eliminates the need for each organization to deploy and maintain its own user account management system, instead enabling them to deploy solutions that accept trusted credentials issued by third parties – cutting time and saving costs. While the Identity Ecosystem will apply to both public and private sectors alike, NSTIC is particularly keen on advancing this concept in the U.S. government.
The report seeks to establish how NSTIC can improve government efficiency and ease-of-use, as well as estimate the benefits and costs of a deploying a proprietary identity management system. The report examines what an NSTIC-aligned system for the IRS would mean, and compares those costs and benefits to the current system.
Fraud reduction and improved authentication aside, the report reveals that an improved online identity management solution would yield a net benefit $305 million annually – up from $74 million yielded using current operations.
When compared with a proprietary solution, the up-front costs for an NSTIC solution for third party credentials would be $40 million to $111 million lower for the IRS. Moreover, the report estimates that annual costs would be $2 million to $19 million lower.
According to the report, the additional savings of an NSTIC-aligned solution are the result of eliminating the need for the IRS to pay for the individual identity proofing of users.
An NSTIC-endorsed solution relieves the IRS of these costs, instead accepting third-party trusted credentials that are already supported by identity proofing. By leveraging third-parties, the IRS could spread identity proofing costs across numerous parties where the credential would be accepted.
For more, read the full NIST report here.