You might remember the 1993 New Yorker cartoon, where a dog at a computer says to another, “On the Internet, no one knows you’re a dog.” Decades later, that problem is about to be solved, according to a digital identity expert.

Canada is making great strides forward on digital identity verification, said Franklin Garrigues, VP Digital Channels for the TD Bank, at a recent ITWC webinar sponsored by OneSpan. “These are exciting times in the business of digital ID,” he said. “It’s a significant opportunity that could unlock economic value of up to $100 billion by 2030.”

While some websites may not care if their visitors are dogs, financial institutions need a high level of confidence that their customers are who they say are, Michael Magrath, Head of Global Compliance with OneSpan. “Digital service is fraught with opportunities for an attacker to successfully impersonate someone.” Nonetheless, 85 per cent of financial institutions offer digital account opening today, seeking to balance risk with an improved customer experience.

From original to digital ID

Enabling trusted organizations, like banks, to use digital identity to exchange records for customers has several benefits, said Eugenio DiMira, Head of Global Compliance AMLATF Program at Manulife. It makes online access easier for customers, improves privacy, and reduces cost and risk through quicker validation with trusted sources.

A risk-based approach is the way to go, said DiMira during the webinar.  There’s no need to collect ID if the customer is buying a candy bar, whereas credit underwriting involves greater risk and requires more information from trusted sources. Canada now allows the use of digital photo ID, he noted. The regulator has taken a risk-based approach by outlining a variety of digital identity verification methods in its regulations. “It is fantastic momentum for digital identity to empower business,” DiMira said.

This has led to the development of technologies that test the validity of a digital ID and even use facial recognition tools to ensure the photo on the ID matches the customer. “The technology is extremely difficult to compromise and a very powerful tool in the tool chest,” said DiMira. “Technology is empowering the exchange of information in a trustworthy fashion.”

Canada is a world leader

Canada is moving forward with several initiatives to make it possible for customers to share their identification data held by one organization with another, said Garrigues.  For example, with consent, a bank might access a customer’s driver’s license directly with the license bureau.

The Digital Identification and Authentication Council of Canada (DIACC) will have a framework in place by July to enable the sharing of information between identity networks in a safe way, Garrigues said. “The public and private sectors are collaborating, making it a model for the world.”

Although it is early days, several identity networks have already launched in Canada to exchange ID information. More are in development. “They must be secure with privacy by design,” Garrigues said. Lastly, open banking is coming to Canada. This allows customers to easily and securely share data held by their banks with third parties. “It’s about sharing data in a way driven by customers,” said Garrigues. “Customers should not have to choose between security and convenience.”