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The technology behind payments can make digital identification safe and secure

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The digital economy provides significant opportunities for consumers, businesses and public services, but there’s a lagging element preventing Canadians from fully embracing these possibilities: our identity documents.

Identity is fundamental to any transaction, whether in the real world or online. If Canadians can verify their identity digitally, they can participate more fully in the digital economy. Yet, identity documents such as passports and driver’s licences remain physical, creating both challenges and opportunities.

McKinsey estimates that countries implementing digital identity could unlock value equivalent to three to 13 per cent of GDP by 2030. For Canada, this could mean at least $50-billion in economic value, including cost and time savings and efficiencies associated with improved regulatory compliance and fraud reduction.

Canadians are already improvising by attempting to apply analog solutions to a digital world. Recent research from Interac Corp., the Canadian payments and digital information exchange, found that nearly half of Canadians have taken photographs of their physical identification for online transactions such as obtaining an insurance quote or renting a vacation property, even though six out of 10 respondents acknowledge that sharing such images is risky.

As Canadians carry out a growing number of digital transactions, the vast majority have come to see identity as one of their most valuable assets. The Interac survey shows more than half of respondents believe it’s more important to protect their identity online than their money. The result underscores the need to prioritize security, authenticity and trust in the development of any digital identification solution.

“Canadians told us they are ready for more convenient, digital options to manage their identity documents online and on their mobile devices,”

Debbie Gamble, Interac chief officer, innovation labs and new ventures

“They also indicated how important safeguarding their identity is, and that digital identification must be secure and backed by trusted technology,” Gamble says.

The Interac survey also shows almost three-quarters of Canadians want their digital identification to be as secure as making a payment online. Nearly two-thirds of respondents said they would favour digital over physical identification if they knew it was being protected by the same security used by their financial institution.

Bringing forward robust digital identity solutions that allow Canadians to transact with confidence is imperative for both public and private sector organizations, Gamble says. She notes Interac has played a key role in building connections and fostering collaboration between the public and private sectors across Canada for 35 years. With more than 300 financial institutions participating in its network, Interac and its suite of payment products and platforms already have a place in the wallet of nearly every adult Canadian.

Interac recently announced the acquisition of Ottawa-based 2Keys, a national leader in developing secure digital experiences for Canadian governments, financial institutions and commercial clients.

This acquisition brings together the unique capabilities of both Interac and 2Keys, providing new opportunities to assist both the public and private sectors in creating and maintaining robust and secure identity solutions. These present and future outcomes will help Canadians better utilize their most commonly used documents, such as driver’s licences, digitally to verify their identity and access a range of services with convenience.

Research conducted by Interac shows that many Canadians feel that technology is making their data less secure online.iStockPhoto / Getty Images

Interac and 2Keys will take a comprehensive approach to building digital identification solutions in Canada, including working with governments to digitize and strengthen existing pieces of identity and supporting the development and use of foundational, government-backed digital identity for new citizens.

Once implemented, digital identifications have the potential to not only increase convenience for consumers and realize efficiencies for government and business, they also promise to reduce the amount of personal information that’s shared across often unsecured channels.

The Interac research shows that many feel technology is making their information less secure. Seven out of 10 respondents said they believe too many online services have access to their personal or financial data, and more than eight out of 10 want to limit the personal information they give to technology and social media companies.

“The idea behind a digital identification is it gives its owner the ability to leverage the credibility of an official, government-issued identification without needlessly sharing their information,” Gamble says. “For example, if I'm shopping in a liquor store, I can verify that I am of legal age to purchase alcohol without the need to share my birthdate or expose other information contained on my driver’s licence, such as my address, that’s not necessary for the transaction.”

As the digital economy continues to expand, it’s essential that public and private organizations work together to provide Canadians with the most secure and convenient solutions possible, Gamble says. Collaboration is fundamental to not only introducing digital identification, but also to cultivating a culture of homegrown fintech innovation in Canada that’s responsive to people’s needs.

Our lives are increasingly going digital, but many of our identity documents haven’t kept up with the times. What are some of the challenges this creates for Canadians today, and how do we feel about the prospect of digital identification? Below are some of the top findings from the Interac Corp. Trust and Identity in a Digital World survey:

Canadians put a high value on their identity and want convenience and security when it comes to managing their digital identity:

  • 83% describe their identity as one of their most valuable assets
  • 52% indicate it’s more important to protect their identity online than their money
  • 75% expect convenient access to digital government services
  • 59% of Canadians find it tricky to keep track of all their physical identification
  • 86% think that a digital identification would be more convenient than physical in at least once case

But our identity documents, such as passports and driver’s licences, remain physical, causing Canadians to behave in contradictory ways:

  • 45% are improvising by taking photos of their physical identification in order to conveniently access their documents digitally
  • 59% acknowledge sharing documents in this way is risky

While Canadians recognize the convenience of digital documents, security remains a key concern:

  • 35% believe their data is less safe than it was five years ago
  • 65% of Canadians fear digital identification could be at a greater risk of theft than physical, despite robust digital security
  • 77% admit they don’t know enough about how to protect their identity online

To feel secure using a digital identification, Canadians are looking for the familiarity of the protections they associate with digital payments:

  • 72% say using a digital identification to access government services should be as secure as making a payment online
  • 62% indicate that knowing their digital identification is protected by the security used by their financial institution would drive them to favour digital identification over physical
  • 58% indicate they would trust digital identification more if they knew regulations were in place to protect them

Advertising feature produced by Globe Content Studio. The Globe’s editorial department was not involved.