Digital IDs in finance Advancing innovation Streamlining processes
Banking on trusted digital identities in Canada’s finance sector
Trusted digital ID solutions improve customer experience, reduce risk, and drive innovation in financial products and services
You show it at the airport to get on an international flight. You give it to a hospital if you need to access health services. And you use it at the bank to make transactions.
Proof of identity issued by trusted sources—governments and financial institutions, for example—has long been the gold standard for verified identification. That hasn’t changed now that the world’s moving online. It’s just more complicated. Especially when it comes to protecting a person’s privacy and personal data as they make purchases, file taxes, forms, and more in the digital world.
That’s why an interbank network recently engaged Deloitte to help develop a common digital identity strategy for Canadian financial services institutions (FSIs) and an implementation plan.
Apart from their interest in keeping pace with regulatory challenges, customer expectations, cybersecurity risks, and pressure for operational efficiency, the stakeholders wanted to unlock the many opportunities and benefits a digital ID system can bring the finance sector. These range from modernizing payments, lowering costs, and improving the customer experience to upgrading security, better managing risk, and shoring up the protection of privacy and user data.
Our primary challenge? The FSIs around the table are competitors, so we needed to help them reach consensus on the various aspects involved in the one thing they all sought: a common digital ID system that would allow their verified personal customers to move as seamlessly and securely as possibly between the institutions and payment systems.
Identifying a use case common to all stakeholders enabled us to build consensus.
Building consensus for a roadmap and strategy that all the FSI stakeholders supported was a challenge since they are competing organizations with different business strategies embracing digital IDs at different speeds.
The solution was to rally them around a digital ID use case they could all find useful: one tailored for FSIs that modelled the financial benefits, such as savings on marketing costs, technology automation, and fraud mitigation.
First, we identified use cases that could serve as a model. We then ran a prioritization exercise, which highlighted the customer onboarding process. Although familiarizing new customers with the organization was not the use case that yielded the highest financial value, it was one all the stakeholders could get behind because they all need to do it.
Agreeing to a common use case enabled the stakeholders to kick-start their digital ID strategies and begin implementing their roadmaps.
Organizations are starting to leverage the benefits of Digital IDs, making them foundational to their products and services. Hesitate, and you risk being left behind because it’s not something you can implement quickly.
Given how vital establishing identity is to our everyday lives, the evolution toward digital ID systems will only accelerate. Canada has seen fragmented digital ID initiatives in the finance sector, but this project is the first solution with momentum. By executing an initial digital ID use case for smoothing customer onboarding, these organizations are positioned to move quickly to iterate subsequent digital ID use cases at their own pace and aligned to their organization’s strategies.
While this digital ID success story is specific to FSIs, it demonstrates how organizations that compete on products and services in other sectors can reach a consensus to revitalize their efforts to create a digital ID system that serves them as well as their customers.
Digital IDs are about choosing speed over perfection and embracing innovation and iteration.
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