Joni Brennan - The Economics of Identity

Long title, isn't it. She will talk about the economics of identity. That might be very insightful because that's one of the big open themes here. Yes.

So Tony, it's your turn. Thank you, Martin. Thank you. So hello and good morning as mentioned, I'm Jon Brennan, the president of the DIAC. We can keep it shorter. And I'm gonna talk to you a little bit about the economics of digital identity in the Canadian landscape. So we'll get some ideas around the numbers. We also heard in some previous discussions, some population numbers of some of the other regions. So to give you an idea, Canada is about 35 million people. And so it would take that into the context of the size as we move forward.

So what do we project as the, the number of growth and potential loss for digital, for the, the digital economy within Canada is 15 billion. That is a conservative estimate. This is 1% of the GDP, and this is the amount of capital and opportunity that we're losing to the Canadian economy by not solving for digital identity.

Now, what does that look like in terms of our digital economy as a whole, we have about a 44 billion digital economy. That's our projected growth estimate for 2018. So this is the digital economy within Canada is around a 44 billion industry.

And can, we can imagine what we could achieve if we could solve for the digital identity challenges using some of the solutions we've been talking about this week. So of course we know that not solving for digital ID has significant down impact on the economy. We know about the breaches. We know that there are millions of dollars lost for what I mean. We might call social identity, breaches things, consumer identity breaches with our, with our stores that we perform transactions with. These accounts are also purchased as dossiers on the dark web.

So lots of security risk there, and we have a call center fraud that is growing every year as well. So lots of loss for the economy by not solving for digital ID and which sectors need this the most arguably government, particularly looking at the government of Canada, we have around 30 minutes, that's spent for every in-person counter visit, that's around $30 per visit to do your identity proofing process. That adds up to a significant amount, 482 million all for that in person proofing.

And what could we gain back into the economy and give back to Canadians in terms of innovation and growth. If we were able to solve these challenges, if we look at the financial sector there's around at least a hundred million of potential net savings, and that is per institution and we have roughly seven or more institutions within Canada. So that's significant for our economy as well in terms of healthcare costs.

The, these are, are massive as well. And so if we think about, of course, our healthcare is, is, is, is nationally based. It's provincially based. So we each have our provincial healthcare system and access to records is not interoperable. And so if we move from one province, for example, British Columbia to the province of Ontario, can we have those records be portable? How are they accessed in the case of an emergency? How are they access for user convenience and our home healthcare management?

So this is also in the high order of magnitude of the millions of dollars that we could save back into the economy, put into healthcare and social needs and put control and, and access back into the hands of Canadians. So we know the basic problems, the pair wise, digital identity. We know this creates challenges. We have too many passwords, Canadians have roughly 92 or more passwords. I have 230, of course I use a password manager. Passwords are reset 37 times per year, and that's 37 minutes wasted.

And that goes up into the hours as we get more and more passwords and more and more interactions, wasteful duplication, we're predicting between 80 million and up to 500 million in terms of KYC and AML duplication annually. And we don't have reuse of that today. Data quality loss of 9.7 million due to poor data quality.

And of course the surveillance economy and, and surveillance capitalism and the customers, the product, and 78% of reporting customers are not comfortable with trusting these online services, of course, in the, in the revelations of Cambridge Analytica, that I'm sure that number is even higher now. So, so, so we have this opportunity, this opportunity to, to, to do better and to leverage this new awareness within our Canadian society, as well as within the global society around these challenges. So of course the digital identity that we have in mind is user centric.

It should be of no surprise. It needs to prioritize our Canadian valuable values principles, such as privacy by design security. Convenience has to be easy for Canadians to use as we saw, if it's, if they have to go through all, all of the enrollments every time, this is going to be a challenge for adoption. As our previous presentations discussed has to be frictionless, and it has to work with today's business models, as well as tomorrow's in terms of our benefits for individuals. It's no longer sufficient for businesses to think of data as their data, the data about their customers.

We have to enable customers to make informed choices, using consent using using privacy by design. And we have to give customers the tools to, to manage that data in a meaningful way about their health, about their family, about their job, about their interactions with government and their life. So the previous talk spoke a bit about industry standards and the role of organizations. We must focus on interoperability, and we must develop and continue to develop industry standards for interoperability.

And of course, in, in, in our context, we must make sure that those standards represent our principles, privacy by design security simplicity. And we must leverage the public sector to underpin that trust, to, to underpin what they do so well today, issuing our driver's license, our, our, our identity cards, our passports.

We need to be able to take that into the digital world and leverage it as a value add from the public sector and from the private sector who does many transactions with us over time, such as our banks or our telcos, being able to add in that contextual data, that this is the same person who's been behaving in the same way with me over time. And so I think the Canadian story is a, is a village story. And so one thing that we recognize very clearly is that everyone has something to offer and everyone has something to gain. The public sector has something they can offer as is the private sector.

And ultimately the Canadians are the ultimate beneficiaries beneficiaries of this new ecosystem. The use cases are many manage our healthcare data, renew our passport. There's been a, a recent move in Canada to be able to use, for example, a, a challenge to be able to use Alexa to use to, Hey, Alexa, please renew my passport. For example, opening a bank account, remotely making a charitable donation. I tried to make a charitable donation one day on the street in Toronto. And I was asked for every piece of information of PII possible. They didn't know who I was, of course.

And all of this was for K Y C a M L simply to make a charitable donation, to help others applying for a loan proving residency, buying a house, almost every transaction in our life could be moved to the digital world, but we need to be able to underpin that trust in order to perform these high value transactions and solving for this new ecosystem is something that no single organization and no single entity can achieve in isolation. Collaboration is the key. And so what we're doing in Canada is we have a collaborative organization known as the DIAC.

It is the representation of the public sector and the private sector working together hand in hand to develop industry standards, trust framework innovations, to underpin and help accelerate this new digital identity ecosystem. And so many of the talks that we've heard today and through this week are trust framework is working to be positioned for these use cases to add this value and to accelerate this ecosystem that Canadians need and demand. So growing community I've been asked if this community is only for Canadians, absolutely not. Moving ahead.

Our digital identity ecosystem is being global. It's prioritizing our values and our governance and our culture and being globally interoperability interoperable. And these are all things that we can achieve together. So this is a Canadian story as of part of a village of the world. And so we absolutely invite everyone to share with us cuz we have much to learn and we have much to share as well.

And one thing that we have that we're very proud of is we do have collaboration of the public and private sector working together hand in hand on these very challenging use cases so that we can ensure those capabilities are accessible to Canadians trustworthy as they can be and interoperable. So what does this ecosystem look like? So is one representation that's emerging. I was gonna try to make it through the keynote without saying the B word. And I think I'll stick with that. There's hyper ledgers and one technology that's being used. There are also other technologies coming forward.

And so we do see the distributed ledger, the block, the blockchain technologies as an additive to a family of technologies that will help us reach our goal. Many of the authentication technologies, all of the work we've been doing for so many years in this industry, all leading together to this family of technologies, to bring us this opportunity for this new digital identity ecosystem in terms of how this will work in Canada.

We have a, we've heard a lot about reuse of K Y C a M L. We are smaller population as mentioned 35 million.

We have, we are a very high banked population around 80% of the population is very high banked. The others are too young, too old or underbanked. So we already have a great head start. Canada's major banks, financial institutions, payment network, governments, technology, and solutions providers are participating in this effort. So we'll be able to use this anchor of trust and this community of trust to jumpstart and bootstrap our ecosystem based on those underpinnings of verifiable claims authoritative attributes.

So we're very excited about this opportunity to focus in, in our economy and our ecosystem build on the collaboration that we have, the confidence and the underpinning of security and trust that we have and to deliver Canadians the digital services that they need and demand and improve their lives and improve their economic opportunities. Making sure that every Canadian has the chance to participate in this economy, whether they're in the cities or the distant, rural, rural areas of our country. So how do we achieve this?

Of course there is a family of technologies and protocol and standards that involve that are involved. So we are building a trust framework, a Pan-Canadian trust framework, and this framework focuses on the business legal and technical needs. It focuses on high level processes to be able to validate identities, issue, credentials, validate attributes, verify attributes, consume attributes, verify organizations. And so in our view, a we need to focus on the verification of people, organizations, and verifiable relationships.

And so we've seen in other presentations, we must know who the relying party is on the other side to a degree of confidence, if we are to perform those high value transactions. So that's a key factor for us. And of course our principles, it has to be easy to use, has to be secure and has to have privacy by design directly embedded into that solution. Canadians will demand this. And so we'll have nothing less Parting thoughts.

We've heard a lot about standards, so it's very encouraging to participate in the European identity conference to see all of the standards work that has been done for so many years. We know that the standards that have come before have formed the foundation to be able to reach the place that we are today. We know that blockchain distributed ledger will be a part of a family of a suite of technologies that when used properly and innovated with all of you and with all of us in Canada, that we'll be able to go further and we'll be able to go far.

We know that we have to address the privacy by design issues and questions within the, within the blockchain technologies. And we're working to innovate there as well. So this journey is not complete and we have more work to do.

And we, and we look forward to the collaboration with all of you to make sure that that journey will continue forward. So, one thing I wanna leave you with as we talked a bit about standards and government standards, industry standards and technical standards, business standards, legal standards, trust frameworks. So much work has gone into this by so many organizations over time. And so I think we should be really proud of all of the work that we've done for many, many years in the space.

But I think that we should also take the time to recognize the hours and hours of work and debate and argument that has gotten us to the place that we are today and the digital identity landscape and the work that has gone into making so many simple solutions for everyday people elegant and easy to use. They're only these solutions are only easy to use because of this work that's gone in through this collaboration, through this standardization and we have more to do. And so we're counting on your input to help us get there.

So remember all of the hard work that you do will make the elegant and simple digital ID solution that we so desperately need in this world to help people have better lives and more economic opportunities. Thank you.

So Tony, thank you very much for your presentation and as always like your presentations and you're so much on time. It's excellent. Alright. I try Martin. Yeah. Let's have a look at the questions. Yes. Okay. Oh yeah. Couldn't you convince the German government to become comparably innovative like you Canadians are, you know, yesterday we had this picture of miracle. I think it was six years back detecting Newland. I think the challenge with the rest of the government is that are still on the boats and not even on the Newland in Germany.

So any, any idea on how we could improve that? Yeah, absolutely. So we should also mention the, so we have some approaches that we've taken in Canada, for example, that, that are commonplace now separating the notion of the credential from the identity, the authentication from the identity. That was an innovation that came through through collaboration. I know New Zealand worked on that early in time. Yeah. And so we know that we have much to learn and, and we would absolutely love to engage with the German government and other governments around the world.

Yeah, we, this can't be solved alone. And so I think I, what we see with digital identity is there's no single solution because identity has a cultural element. And so we have to leverage our culture, how we're formed our governance and our governments, and then what works for our population. So I'm sure we have much to learn from the German government, but we'd be very happy to share as Well. Okay. Yeah. What is the economic economic its incentive model to participate in the initiative?

Yes, absolutely. And so we can talk a little bit about that. So in today's world, when we are presenting a piece of trusted data, it's the requester of that data that helps to fund the, to helps to fund the ability to get access to that data. And so what we're looking at in Canada is no different than this. And so if I am a relying party, who's requesting a higher assured piece of data, then I'm going to pay into the network to be able to access that data, to be able to, and, and I will actually lower my costs. I think there's somewhere in the area of, as we said, $30 per improve in person.

So if you can imagine that in orders of magnitude, now, we've still, there's a payment being made, but it's much, much lower maybe from $30 to $3 or something like this. And so the requester and the receiver of that verified claim that verified attribute will, will pay in. So that the, the, or one thing we don't talk enough about is the organizations that do the work to verify that data. Yeah. And they need to recoup their value as well.

So, Okay. But there are business models, there are business models.

So, and finally, how do you avoid data misuse or secure the collected data of people? Activities?

Yeah, 100%. And so I, I think this is something that we all have to focus on and keep the bar very high. So we have privacy by design. We have privacy regularization known as PIP. So we have regulatory schemes in place. And of course they continue to evolve as the technology evolves.

You know, we think that key is that Canadians can manage their data better. And so not only building a wall for privacy, but enabling them to be part of that transaction, but we also have regulatory schemes such that data minimization is, is part of the scheme. There will be no request for data that are not necessary for a particular transaction.

If there, of course, where there are authorities, national security government are needed, there are high bar legislative and regulatory schemes for those types of scenarios, but privacy by design data minimization, high security, these are all built in. Perfect. Thank you very much for your presentation and for the answers.