Horizon Three:

By Chris Ford, President | Published: August 10, 2023 in Blog

Introduction

During the era of cryptocurrency, which seems to have spanned from the dawn of Bitcoin to the great FTX debacle of 2022, digital currencies were all the rage. You couldn’t scroll through X (R.I.P. Twitter) without reading about NFTs or the Metaverse. But it was all a big distraction, when, in reality, everyone should have been focused on the benefits of digital identity. We’ve already—in Horizon One and Two—learned about digital identity solutions, the state of digital identity in Canada and the many benefits. Now, let’s take a look at how digital identities could be integrated into our daily lives, providing an opportunistic tech company with a safe, secure way to leverage our information.

Moving the Needle

There’s an interesting debate about whether digital identity should be controlled by the government or private sector. In all likelihood, it will be a hybrid of both. Digital identity can be political. In the U.S., for instance, personal freedom, privacy and government overreach are sensitive topics. That’s why the U.S. will likely be slow to adopt digital identity.

Canada, on the other hand, has a pleasant combination of socialism and capitalism, strong social services balanced with a robust private sector where competition drives innovation. As a result, we have an opportunity to play a leading role globally when it comes to digital identity. Imagine a world in which digital identity is full activated—it’s like something out of a science fiction movie.

• You never have to remember a password, carry keys, access cards or FOBs. Your identity is confirmed via facial recognition or another biometric, like your fingerprint. For example, you’ll be able to stand in front of a door, a device will scan your face and the door will open—or not.

• You never have to fill out another form online or in person. Your digital information is always with you. So, when a third party—like your bank teller or doctor—requests it, you’ll be able to provide them with instant access.

• Applications and websites will no longer be able to access data from your mobile device without explicit permission.

• When you order in a restaurant, the server never asks whether you have any allergies. They will have already been given access to that information.

• When you shop for goods and services, you can indicate your wants and needs on your digital profile and vendors can make suggestions accordingly. That way, you get targeted, high-value offers, saving a lot of time and energy in the process.

• When you change your address, just update it on your digital profile and interested parties will receive an update. You don’t have to waste time changing your information at the doctor’s office, etc.

• When you make purchases—at the grocery store, for instance—there’s no need to flash a credit card or Apple Pay. Your digital identity is already configured with your payment preferences and will complete the transaction.

• Receipts are totally digital and associated with your digital identity. No need for annoying paper or archive emails.

• Your digital identity can be used seamlessly in your personal life and at the office. No more laborious onboarding of personal information, whether it’s getting new flood insurance at home or updating the human resources department with your social insurance number at work.

• At any point, if a third-party hacks your information, you can block them or severely restrict what they can access.

• Since all financial transactions are tied to your digital identity, it’s basically impossible for fraudsters to access your accounts and information. If they are able to fraudulently redirect money or resources, all activities will be recorded in a digital log, making the hacker immediately traceable and the money instantly recoverable.

Does this type of future sound good? If you’re an Oath Keeper or a libertarian in the United States, it probably sounds like a hellacious dystopia, rife with diabolical government surveillance. Moderates, on the other hand, will probably find it very convenient, while understanding that achieving this sort of frictionless society will involve sacrificing at least a bit of privacy. What will it take to move toward it? Let’s tackle that next.

How fast can we expect change?

These two questions help predict the future:

1. What is the immediate and undeniable consumer value?
2. What is the profit motive for the entities that need to provide the product or service?

In the case of digital identity, the consumer benefits are tangible, but they’re also incremental, accruing over time as institutions implement them. A bank might implement facial recognition. A province might mandate digital health records. A security company might bring retina scans into the mainstream. But there’s unlikely to be a singular moment where consumers realize a life-changing benefit.  

From an implementation standpoint, the central digital identity provider will be a public sector entity or a set of private entities following a standard set by the public sector. In either case, the public sector does not have a profit motive, which means that we cannot satisfactorily answer question two.

So, what does this mean? We have a very distributed, incremental consumer benefit and implementation path with a strong profit motive. Unfortunately, this means that we should expect digital identity to progress at a glacial pace. The market forces are just not strong enough. But that’s just the conventional view. Let’s look at an alternate scenario with a powerful profit motive.

Meta and Facebook. The end of an era?

Advertising-based big tech is one of the most successful new business innovations of the last twenty years. Google and Meta have constructed massively profitable businesses by providing free search, email, map and social media services, in exchange for harvesting and monetizing our personal information. Most consumers are satisfied with this relationship because they get free services and occasionally useful, targeted marketing. Even still, Google and Meta’s targeted marketing could be more precise—especially if they had some of the information that would be stored in a digital identity.

• Big tech doesn’t know your salary or net worth.
• Big tech doesn’t know all of your spending habits.
• Big tech is pretty much limited to your online activity, blind to huge swaths of your life.
• If they had access to your personal information, like banking, past purchases and spending preferences, they could enhance their advertising.

The benefits?

• You would never see advertisements for products you’ve already purchased.
• You would be able to declare your interests, enabling more relevant advertisements.
• Vendors would be able to assess your value as a future customer and offer high-value goods and services.
• And, most interestingly, the consumer would be empowered to participate in the monetization of their personal information. Heck, the digital identity provider might even pay for it.

In this scenario, there’s a powerful consumer benefit and strong profit motive. Keep in mind that Google and Meta would need to disrupt their existing business models, a big decision to say the least—but now is the time. AI search engines, like Open AI, are encroaching on Google’s enhance-search territory. And people are becoming increasingly blasé and distrustful of Meta, whose recent foray into the Metaverse seems to have failed spectacularly. The next big opportunity could be digital identity. And if Big Tech gets there first, it could be a disaster, considering their willingness to prey upon user data and generally operate with little regard for society writ large.

In an ideal world, a good outcome is one that empowers individual autonomy over their data. Consumers decide how and when their data is used—and can profit from it. On the plus side, there’s a Canadian company making waves in the digital identity space, becoming a positive alternative to the Googles and Metas of the world. It’s called IDENTOS. Last year, it landed on the Globe and Mail’s list of the country’s top growing companies. They provide user-managed access to private data for healthcare, government and financial services, all in one app. The future is closer than we think. It’s inevitable that technology will enable a more complete digital identity and a rich assortment of related services. We can safely predict that public sector investment will continue to be slow and ponderous—the unknown is how fast the private sector will be able to innovate compelling offerings that accelerate the journey.

Conclusion

In the Horizon Series, we’ve learned a lot about digital identity, including potential solutions for your business, the state of digital identity in Canada, the undeniable benefits, how it can transform our lives and how it could represent a major opportunity for tech companies when it comes to monetizing personal information. Right now, Intelliware is an expert in the past, present and future of digital identity. So, if you want to be on the cutting edge of information access and protection, feel free to reach out. The future of your business depends on it.

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