The time has come to address the digital identity problem, and the economic story behind it. Given the number of recent high- profile data breaches, people are starting to realize just how vulnerable their data is. The Home Depot’s data breach in 2014, affecting 56 million credit and debit cards, cost the company USD 263 million in mitigation expenses, noted the DIACC’s recent “Economics of Digital ID” white paper.

“These examples, among many others over the last decade, have eroded consumer confidence in the digital economy. This has caused many consumers/citizens to be hesitant about sharing any information online, let alone sensitive identity data they perceive could be lost, stolen or shared in an unauthorised way without their consent,” the report noted.

Interac’s white paper – Digital Identity: Unlocking the Full Potential of Canada’s Digital Economy – highlights some startling statistics: Identity theft has been growing at an average of 33% a year over the past three years. Identity fraud is now regularly costing Canadian businesses more than $200 million per year.

The United States is experiencing a similar economic problem. A July 2018 report: “Better Identity in America: A Blueprint for Policymakers” details a comprehensive policy agenda for improving the privacy and security of digital identity solutions. In 2017, $16.8 billion was lost in the U.S. due to identity fraud – a year in which the Identity Theft Resource Center also reported a 44.7% increase in the number of data breaches. Pursuing international coordination and harmonization as well as educating consumers and businesses about better identity are among the key initiatives listed.

At IdentityNORTH, Neil Butters, Director of Payment Technology at Interac, spoke about the economic story shaping Canada’s industry.

“Digital ID is a complex and a daunting concept,” said Butters. “Digital natives expect digital service, and it can’t be too difficult. It has to make the digital lives of Canadians easier.”

Neil Butters talks about Canada's economic story shaping Digital ID at IdentityNORTH

Neil Butters, Director of Payment Technology at Interac

The economic impact to Canada of solving the digital identity problem is estimated to be close to $15 billion. That’s about 1% of the GDP of Canada.

Digital commerce is estimated to grow from 21 billion to 28 billion in 2018, and identity is key to that growth.

The identity ecosystem looks like this today: Foundational elements are used to gain health cards, drivers licence, birth certificates. Then there are extended pieces, such as bank accounts and credit cards. To a certain extent, you need the foundational pieces to get to the extended pieces, said Butters.

“Which card do you use most often? A payment card? Drivers licence? Health card? Think of a use case that doesn’t involve an exchange of money or value…. We believe if you solve for one, you solve for both,” he said.

Interac has created a developer centre and intends to use it to spur innovation and integration. By working with other parties and keeping the user at the core, Interac demonstrates privacy by design values and how collaboration is key to success for Canada’s digital ID ecosystem.

For more details on the IdentityNORTH 2018 Annual Summit sessions, including ‘Cause and Effect: The Economic Story shaping Canada’s Digital ID Industry,’ join our community mailing list to view the full Conference Report.

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2019-03-11T19:10:03+00:00August 15th, 2018|Categories: Articles|