It has happened to all of us.
Perhaps you were shopping online or using your favourite app when you drew a blank on your password. As you rack your brain, you spot those buttons offering a short cut by logging in with Facebook or Google.
Password fatigue is real, especially when the COVID-19 pandemic is forcing us to work and transact more online. But given privacy concerns, is it really a good idea for Facebook and Google to be the default methods for Canadians to verify their identities on the internet?
Economic lockdowns are accelerating e-business, which, in turn, is creating challenges for companies of all sizes. A lack of face-to-face interaction makes it harder to make sales and sign up new clients. It’s also increasing fraud and cybersecurity risks for businesses and consumers.
Although not all businesses are bound by know-your-client rules to verify a customer’s identity, all have a vested interest in mitigating risk. These trends highlight the need for Canada to create a digital identity product for its citizens that is secure and gives people more control over their personal data.
Digital identification allows people to securely verify their identity online. It’s an electronic equivalent of paper or plastic identification such as passports or driver’s licences. Credentials can take different forms, for example, e-documents saved in a digital wallet on a smartphone, and can use a variety of technologies for authentication: passwords, security tokens, PINs or biometric data.
Verifiable digital credentials would help companies from fintechs to retailers to auto dealerships manage risk as more transactions are conducted online. It would also support entrepreneurship, by reducing paperwork and making it easier for business owners to vouch for their identities when applying for permits, loans or signing contracts with suppliers.
“This would absolutely enable a whole bunch of new industries we probably haven’t even thought of that could exist,” Chami Akmeemana, chief executive officer of Convergence.tech and Trybe.ID, said at the IdentityNORTH symposium. “Of course, the economic development is massive as well.”
If widely adopted, digital identities have the potential to generate the equivalent of 3 per cent of GDP in developed economies by 2030, according to a study by McKinsey Global Institute.
Canada can’t afford to squander the opportunity, especially if it could help the small-business sector, which is being crushed by government-mandated shutdowns. Smaller companies provide nearly 70 per cent of private-sector jobs in Canada.
A separate study by the Digital ID and Authentication Council of Canada (DIACC) estimates that a secure digital identity could generate $4.5-billion of added value to small and medium-sized businesses by simplifying business processes and cutting red tape such as registering for licences.
It would also be a godsend for consumers, making the authentication process easier and giving them more control over which third parties can access their personal data. Consider this: the average person has about 92 accounts registered to one e-mail address, and spends about 10 hours each year resetting forgotten passwords for at least 37 of those accounts, according to password manager service Dashlane.
What a colossal waste of time.
DIACC, which is a non-profit representing federal, provincial and private-sector stakeholders, has developed standards for advancing digital credentials. Now Ottawa needs to show leadership by making digital credentials a national priority.
“The digital identity we have in mind is one that is secure, trustworthy and portable using digital technology,” DIACC says in its report. “It makes responsible use of the highly connected world to bring value to individuals and businesses alike.”
Some provinces already have digital credentials. Alberta and British Columbia, for instance, offer digital identities to their residents to securely access government services online.
Ontario has launched its own digital identity project with the aim of offering secure digital credentials by the end of 2021.
Those projects are a promising start, but the need for digital credentials goes far beyond accessing government services.
Canada needs a secure digital identity product that works for the private sector and ordinary citizens who are wary of ceding control of their personal information to U.S. tech giants.
A made-in-Canada solution must prioritize security and privacy. Canadians are a cautious bunch, so the only way to ensure mass adoption of such a product is to toughen up our laws and impose steep penalties for privacy breaches. Ottawa’s proposed Consumer Privacy Protection Act, introduced in November, is already being panned because it would provide businesses with loopholes to collect some personal data without consent.
“If we do not focus on making digital identity a priority for Canada, there will be many missed opportunities, including the loss of potential growth in the digital economy, the risk of falling behind other developed nations treating this as a higher priority, and the risk of internet giants such as Google, Facebook and Amazon taking on even larger roles in citizen/consumer’s lives,” DIACC’s report says.
Other countries, including Estonia, Denmark and India, already offer their citizens digital identities. Canada would be wise to follow suit.
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