Trust, not technology, will be key to success of digital ID plans.
Raise your hand if you’ve ever forgotten a password or if you’ve had to search for your phone so you could find the text just sent to you containing the code you need to complete an online sign-in.
Or how often have your members complained about being asked repeatedly to provide the same ID information in order to use your services? And finally, how worried are you about cybersecurity and the potential exposure of your members’ private information?
Removing the friction that causes these and many similar problems could save time and money, improve security and open the door to many new digital initiatives.
The good news is that work is well underway in Canada to develop digital ID systems that can eliminate many of these concerns, and some provinces and the federal government are moving forward, tentatively. The not-so-good news is that implementing any effective system will depend on winning public trust and support, and we are a long way from having that.
Trust Will Drive Digital ID Adoption
Interac Corp. is one of the key players in the digital ID space. In recent years, it has invested millions of dollars, raised from the credit unions and banks that own it, to boost its investment in developing the technology in this area. But a look at its website, and public comments illustrate the barriers.
Last April, Mark O’Connell, Interac’s president/CEO, delivered a speech to the Empire Club of Canada, a 119-year-old forum for advancing dialogue on issues of importance to Canadians, that focused on the need to build trust.
“Trusted digital ID will be the foundation for secure, convenient and inclusive participation in the digital economy,” O’Connell said. “It will underpin not only how Canadians make payments, but how they access government services and conduct business both online and in person moving forward.”
As well, Debbie Gamble, Interac’s chief officer/innovation labs and new ventures, has several separate articles on the organization’s website that examine the issue of trust from several angles. “We know that trust is what’s going to help drive adoption of digital ID, and we also know that Interac is one of the most trusted brands in Canada,” she explains in this article.
“Even the most technically sophisticated digital ID system will fail if it doesn’t enjoy the public’s trust,” she writes in another article. “How can we build that trust? Through collaboration, transparency and openness.”
She notes that only 27%of Canadians believe technology is making their personal information safer and 71% say too many online services have access to their personal or financial data. An Interac survey found 83% want to limit the personal information they provide tech and social media companies. “All this speaks to a deficit of trust,” Gamble says.
But Interac is certainly not alone in highlighting this issue.
A survey done for the Digital ID and Authentication Council of Canada, found 91% of Canadians want control over their personal data collected by governments and 86% of respondents want control over personal data collected by private organizations.
“A trusted pan-Canadian digital identity framework is essential to digital economic prosperity,” said Joni Brennan, the council’s president, in a news release. “While there is some progress on recognizing the importance of digital ID, Canada is still at a stage where more work must be done on the policy side to ensure a truly digital economy.
“A trusted digital ID framework needs to be designed with people at the centre,” Brennan said. “All Canadians need to be able to choose if and how they want to use their digital ID credentials. Digital ID is not intended to replace existing physical ID methods, but as an optional supplemental tool.”
In a later CBC Radio interview, Brennan said she expects to continue to carry physical ID even while using digital versions.
Risk of Falling Behind
Last spring, new federal Chief Information Officer Catherine Luelo warned that action was needed. “We are falling behind in competitiveness if we don’t advance this file. We had been in a position of being in front, and we are falling behind—in fact, we’re very far behind.” What is needed are “purposeful actions funding, resourcing and, frankly focus” of all governments, she said.
At a conference in early October, Michael Wernick, former clerk of the Privy Council, which supports the prime minister and the cabinet, and now a senior strategic advisor associate for MNP Digital, said that while people on the data side always push for more sharing, “politicians will be very influenced by countervailing issues around privacy, around data breaches. They will be scared: a data breach can be a career-ending move for a minister or deputy minister. And the chill around project failures is enormous: They don’t want one on their watch. So, the easy thing to do is to slow down. Under any pressure from the opposition or the media, the instinct of the government of the day—whoever they are—is to retreat.”
The federal government is aware of the trust problem. In Digital Ambition 2022, its latest plan for improved digital services, released in August, the federal government insisted: “In today’s digital landscape, it is imperative that Canadians trust that their government is protecting their personal information and data.”
But the same report noted that the current landscape is not hopeful since 68% of Canadians report problems with digital government services and Canada ranks last among 36 countries in the frequency of use of digital government services.
Earlier this year, Mona Fortier, president of the Treasury Board of Canada Secretariat, which is responsible for the digital plan, said that having a digital ID system would protect Canadians from identity theft and fraud, as well as speeding access to government services.
But she also noted that the government had yet to instil trust in digital systems. The government hopes to improve this by working with industry and other governments.
Next Steps for Digital ID
“The next step in making services more convenient to access is a federal digital identity program integrated with pre-existing provincial platforms,” the Digital Ambition plan says, ignoring the fact that most provincial platforms don’t exist.
The plan also promises broad consultations with Canadians in early 2023 to get their views on the topic, but the secretariat currently has no details on what is planned.
The delay in action and the focus on talk is also seen at the provincial level. Earlier this year, faced with opposition to its digital ID plans, Saskatchewan put the plan on hold and said it would monitor the public’s acceptance through further consultations before any decision to go ahead.
Ontario seems to have taken the same approach, although it won’t say that in so many words. In 2020 it announced a plan would be rolled out in 2021. But late last year it announced it was delaying plans for the digital ID program until later in 2022. But now that late 2022 is here, the government refuses to talk about any program, saying simply it has no update, and points to a webpage that highlights potential benefits at some point down the line.
Quebec has plans to introduce a digital ID program in 2025 but hasn’t said much about what that will entail.
Winning trust to move ahead may prove difficult when a substantial percentage of Canadians firmly believe such initiatives are the work of international conspiracies.
In 2018, the Canadian Bankers’ Association released a brief Canada’s Digital ID Future – A Federated Approach calling for a federated Canadian approach to the development of a digital ID framework that would see each province develop its own plan but coordinate activities with other governments.
“Canada’s strong financial institutions must play a key role,” the brief says. “The World Economic Forum stated in its (2017) report that financial institutions should champion efforts to build digital ID systems and lead the creation and implementation of identity platforms.”
Support for this position may be a slippery slope that leads into a swamp, since this would be the World Economic Forum that is now attacked by Conservative Leader Pierre Poilievre, who has accepted the view of right-wing conspiracy theorists who believe the Forum plans to control the world economy. A significant percentage of Canadians appear to share this view or at least have serious concerns about privacy and don’t trust governments with their information.
One example of this was displayed during the COVID-19 pandemic when few people downloaded and fewer used the federal app designed to alert users if someone they had been near tested positive for the disease. In the IT world, if trust is missing, even if you build it, they may not come.
The Tech Side
A digital ID system has three elements: technological, financial and social. Credit unions are actively working on the technology side since CUCC, the continued entity of Credit Union Central of Canada, represents the system at Interac.
In recent years Interac has purchased a digital ID company, 2Keys Corp. and reached a seven-year deal with SecureKey Technologies Inc. for its digital ID services for Canada. Interac hopes it will drive the evolution of digital ID services in Canada, leveraging the expertise and track record of SecureKey. Shortly after that deal was announced, SecureKey was taken over by Avast, a global computer security giant.
Interac’s goal is to become a digital ID hub that will allow its owners, credit unions and the big banks to lead the way and connect and protect their customers.
Thanks to its contract with SecureKey, Interac offers two ID products that some credit unions are providing. Eight credit unions and the big banks offer Government Sign-In by Verified.Me, which lets members use their credit union sign-in to access federal government services without providing any other information. $397 billion Desjardins, Lévis, Quebec, is the only credit union currently also offering the separate Verified.Me version of this service, which provides access to some partners such as Costco, Telus and a couple of health care providers.
“With nearly 300 financial institutions connected to our network, Interac digital access services include over 280 government services relying on our verification and digital sign-in tools,” the company said in an email. “The recent transaction with SecureKey (now Avast) has augmented our authentication and verification offerings. These services, which build on our reputation as the most trusted financial services brand in Canada, allow individuals to securely share and maintain control over their personal information. We are working with credit unions across Canada to enable them to bring these important services to Canadians.”
From a credit union perspective, it is a bit jarring that Interac highlights Canada’s “uniquely concentrated financial and banking sector” as an advantage in the development of a digital ID system since fewer players are involved than in countries like the U.S.
Financial and Social Implications
The financial element in digital ID refers to the various business benefits a comprehensive system is expected to provide. For example, open banking will require a way for people to assure their various financial institutions of their identity before any information can be shared. Another example, the health care system could save billions by using digital ID “to secure patient information, make registration and billing more efficient, and prevent identity theft and pharmaceutical fraud,” an Interac white paper says.
But the Achilles’ heel of any digital ID plan appears to be the social and cultural side—the need to persuade users it is safe, secure and provides benefits to them.
In his April speech, Interac’s O’Connell warned about what might happen if a Canadian solution isn’t developed.
“We’re doing this because we know a cohesive solution made in Canada—by organizations that intrinsically understand our unique needs—will ultimately be best,” he said. “The flip side is a situation in which global ‘big tech’ companies are responsible for authentication of Canadians and the exchange of their foundational data. This is something I know many people both in government and the public will have concerns about.”
Erik Zvaigzne, VP/innovation at Convergence.Tech, a consulting and digital ID company that has developed a decentralized ID system used by about 600 organizations in 12 countries, thinks the federal government needs to play a bigger role in moving things along.
“It’s about time they got involved to try and reconcile these things, instead of letting provinces go off their own way,” he says. “If the governments don’t get their act together, Interac will sweep up a narrow segment, but honestly, you’re going to see companies like Apple and Google move in with their initiatives, which won’t be consumer privacy-focused.”
He warns that if the federal government doesn’t get this right and provide a good user experience, “no one is going to end up using it.” The alternative could be a series of provincial walled gardens that isn’t much better than the current status, except that you wouldn’t have to use a password.
Zvaigzne suggests credit unions take advantage of their ability to move more quickly than the big banks that have large legacy IT departments and work toward “the Holy Grail of a reusable KYC (know your customer) so that there’s no friction in sign-up or interaction. “
“I think the sector needs to really approach that with an open mind and see it as an opportunity, instead of reacting to what the government is doing, and take a more proactive approach.”
Art Chamberlain is a writer who focuses on the credit union system.