By Keith Shiner, Vice President Delivery | Published: August 8, 2023 in Blog
Introduction
At coffee shops and dinner parties, in the papers and on TV, everyone is talking about digital identity. It’s supposed to be the future of everything. So, what is it? In the first blog in this series, we wrote about the current state of identity solutions and how Intelliware can help. In this blog, we’ll discuss digital identity more broadly, including Canada’s progress on the world stage and what consumers and business owners can expect next.
Imagine a world in which physical forms of government identification—like a driver’s license, passport or social insurance number—are securely stored across a federation of data providers. It could be a government-issued app. Or a server accessible with facial recognition. That’s just the beginning, though.
Our use of digital identity could extend into our personal lives, too, with all of our information (address, medical records, shopping preferences) saved in the cloud, safely secured and immediately accessible. There are countless benefits to using a digital identity, which we’ll discuss here, and in Horizon Three.
Consider this: no more memorizing passwords across dozens of accounts. No more filling out forms at the doctor’s office. No more juggling receipts after a trip to the mall. Just curate your digital identity, allowing access to the selected elements of your choice. It would streamline everything—all information accessible via facial recognition or biometrics, shared only with your permission.
When it comes to financial services, the possibilities are endless. If you’re applying for, say, a mortgage or a loan, instead of going through a multi-step process to obtain a proof of employment and income, among other maddening paper-pushing processes, just share your digital identity (which would contain all of the necessary information) with the appropriate third party. Process streamlined.
Now, understandably, the topic of digital identity raises questions about fraud. What if my account gets hacked?, some might wonder. But, in a lot of ways, your digital identity will be more secure than physical forms of ID, or the important numbers, codes and passwords you keep stored on your phone. Wallets can get lost. Phones can get broken. Passwords can get cracked (1234 isn’t fooling anyone anymore). But with a digital identity, the verification process will be personalized, only possible with your face, fingerprint, etc. And you’ll be able to block outsiders and immediately trace and identify anyone who tries to gain access. That’s security.
Canada and Digital Identity
Compared to other countries, Canada is arguably quite behind when it comes to digital identity. Sure, our most populous provinces (British Columbia, Alberta, Ontario and others) have their own plans to adopt it, but according to Oliu, a digital identity service, we rank seventh globally in terms of digital identity uptake. Citizens in countries like Estonia, Portugal and Denmark have used digital identities for more than a decade.
So, what’s the problem? It could be that we have 14 provincial governments at various stages of their digital identity plans, a modest distrust of government in general and an inconsistent relationship between the public and private sector. Canadians also place a premium on keeping their data safe. One thing is for certain: our digital identity solution will need to be a series of interoperable networks, both public and private—financial services, healthcare, even the lottery and gaming commission, all working together.
On the bright side, Canada has a federal initiative to advance digital services. It’s called the Pan-Canadian Trust Framework, launched in 2016, with the goal of enabling Canada’s full and secure participation in the global and digital economy. That’s a step in the right direction. Plus, consider how the CRA allows Canadians to log-in using a third party, namely, their bank. This is an example of the public and private sector working together, sharing information securely. On the global scale, Canada is very well positioned with this type of framework, and with a little more awareness about the benefits of digital identity, we could become a world leader.
What can we expect next?
In the near term, digital identity has the potential to drastically reduce friction, while increasing security and convenience for financial services. Banks have long been required to comply with Know Your Customer (KYC) regulations. A world in which a single, unassailable digital identity is used for banking would make it very difficult to construct false identities. And if bad actors try to co-opt someone’s existing digital identity, the co-opted individual would be able to see the activity on their digital profile and intervene.
A single, digital identity would also allow banks to manage individual consumer risk more effectively. In today’s world, banks are dependent on credit bureaus, like TransUnion and Equifax, to provide holistic credit activity for clients. These services often have errors, omissions and can be out of date. Many banks struggle to identify the same customer across business lines within the borders of their own organization, much less across other institutions.
Lastly, should digital identity come with enhanced authentication capabilities and trusted networks, banks should be able to more reliably screen out fraudsters who attempt to access accounts of legitimate customers. We have made great strides towards improved security with stronger passwords, geo-fencing and multi-factor authentication but criminals continue to parry and innovate successfully.
Ready to embrace the transformative potential of digital identity for your business? Contact the Intelliware team today to learn more.
Up next, in Horizon Three, Intelliware CEO Chris Ford will give his take on how digital identity could change our way of life and put big tech out of business.
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