Thank you, everyone. It's a pleasure being with you today. It's been such a fascinating day of discussion, even through the room and into the hallway.
So, yes, I'm Joni Brennan. I'm President of the Digital ID & Authentication Council of Canada. I've been working in the nonprofit sector for around 25 years, globally in Kintyra Initiative, in the U.S., and now for the last 12 or so years, specifically in Canada. I'm also the President of the IDPRO, the Identity Professional Association. So if you are an identity professional, and I assume that you are, and you're not a member of IDPRO, please do become one. So let's go into our discussion for today regarding sovereignty and digital trust.
So if you're not aware of who DIAC is, we are a not-for-profit association. We're a strategic alliance of public and private sector organizations, and our mission is to unlock digital economy opportunities by advancing digital trust and identity that's built with privacy, security, and, of course, number one, economic utility for all of its users. We have developed a certification program, and we are in an ecosystem where govern governs and the market competes.
And we are counterparts for enabling the recent MOU between the government of Canada and the government in the European Union to advance mutual recognition of digital credentials and trust services, but more on that later. This is not that talk for today. We're going to go into our discussion. So let's start with the federation paradox and how this – I'll present what the paradox is and how it actually has the ability to turn friction into a feature. So I'll share with you what I'll call the 13 kingdoms problem.
So Canada, much like the European Union, is a collection of governments. We have ten provinces and territories, ten provinces and three territories, and identity for the large part, functional identity, is authoritatively within the provinces. So the province that you're born in, they are the authoritative holders, our birth records, death records, health data, all provincially held.
Now, what that means is that we do not have a governance structure that enables the federal government to decree a regulation for national identity, and in many cases, even a regulation or a national standard. We do – the federal government does have that reach for things like national defense or things like financial regulation, but in terms of functional identity for people and in some cases businesses, this is held within the jurisdictions. So largely we are a coalition of the willing in terms of the way that we move forward as a country.
So what it means in practice is that we don't have quite the same construct as you do as Brussels. We have essentially a dinner party with 14 guests, and everyone wants to be the host of that dinner party. It's very cordial, it's very polite, but quite often a challenge to actually get food onto the plates and move your dinner forward in the way that you would like.
But the plot twist for today is that, yes, for geopolitical reasons, I'm sure that as we've had our discussions today, we're looking at sovereignty, particularly Canada is looking at sovereignty in a different way, being one of the middle powers, re-looking at how we address all of our governance needs and our place within the economy. This talk is actually centered on the sovereignty of our provinces and what we call co-sovereignty within our ecosystem.
So yes, Canadians are very polite. We do have 13 provinces and territories, and they are fiercely independent. They protect their authority, they protect their priorities from overreach or what's perceived as overreach of the federal government. So essentially, we have a polite culture of no. So this means that in terms of having a national identity, no thank you. In terms of having a national regulation, no thank you. In terms of having a national coordinated approach, unfortunately, no thank you.
So while we are paying close attention to what's happening within the European Union, we sit somewhere in similar culture and style, but we think that we have a lot to learn from your approach on the way forward. And now we have to take our constructs, our culture, and our governance on the way forward to how we will move our identity community forward. So what does this mean? You could call this fragmented, and absolutely it is. But we have the opportunity, and in fact, we have the requirement of leveraging these fractures as opportunities.
Opportunities to innovate, opportunities to build new, creative, competitive solutions on the way forward. This is not a fracture for us. This must be a design condition. So when I have the opportunity to meet with you through this conference, I would love to hear how we can work together in the context of filling in those fragments with design features for how and where we can work together. So I think this will be known for you, but for tying our relation between Canada and the European Union together.
Of course, you have the law. We are in some ways envious. We understand that there's no single view on this way forward from the presentations earlier, but you do have a more unified approach, and particularly I'll commend the funding for the large-scale pilots. This certainly is a game changer. That means, however, in the European ecosystem, there's more of a tendency towards complying first and then innovating. In the Canadian approach, we work with the coalition of the willing.
We must be market-driven for our consensus-based model, and that means we have an approach that is more deploy first and then coordinate on our way forward. Similar opportunities, different lenses to look at for how we innovate and move this space forward. So what do the gaps look like in this space?
Well, we have gaps in authority, as we've mentioned, with no regulation. We have gaps in adoption with different rates of adoption and deployments across Canada.
Of course, wherever you do have that fragmentation, you have gaps that can open security risks, and we have gaps in terms of economic value is the only way that we will move forward. So let's look at three drivers to how we actually can move our ecosystem forward in Canada. Each one of these drivers is more urgent than the one that came before it. So if I have not been clear, economic utility. This is the number one driver within our ecosystem, within our Canadian provinces and territories, and for our businesses.
Because if you cannot do business with your credential or with your wallet, you do not have usefulness. You have an administrator hurdle to go around. The polite culture of no thank you comes into play. So I think we may have seen this stat before, 13% of GDP unlocked by 2030, according to McKinsey. What's interesting about this stat is that much of the value is actually projected to go to individuals and not institutions. So I have a personal goal and a goal with you that when we come back in next year and the year after, that we can talk about exactly how we've realized on that GDP unlock.
But in the Canadian ecosystem, unlocking that value in action looks like this, particularly in the legal sector. Now, since we don't have a federal mandate, we are now seeing mandates from regulated industries, from regulated jurisdictions. So our certification program is being adopted to help extend the utility of Know Your Customer and any money laundering regulations, which is moving adoption forward in our space. We have more than 700,000 client ID verifications recorded. We know that the numbers are way higher than this. This is a small sample of our membership.
We also know that within the Canadian and U.S. ecosystem, that the compliance costs are in the area of $61 billion. So we're solving business problems by unlocking digital verification utilities. And in Canada and in the U.S., we know that 99% of financial institutions report that they are suffering from financial crime. So here's where we're moving forward using sectoral regulation to create obligation and then using certification to drive the space forward.
Now, the second driver is what we'll call the trust bridge. And this is on leveraging existing institutional trust.
Now, for example, in the Canadian ecosystem, we have a very highly banked population. We have a strong payment network. And our payment network, Interac, has now built an identity service, an identity verification service, that has 20 million users, over 300,000 users. And it's built on the trust bridge. We have a strong payment network. And our payment network, Interac, has now built an identity service, an identity verification service, that has 20 million users, over 300,000 institutions are connected. It's all based on consent. It doesn't create any new databases.
And it moves forward solving economic challenges. Of course, you in the European ecosystem will be familiar with some of these approaches from the Nordics, Bank ID in Sweden, other jurisdictions. I think the challenge will be leveraging the trust and the identity verification that exists in the private sector. But then making sure we can get up to that level of assurance high that is required for those very careful health documents, government services access as well.
So, again, we're taking lessons from the European ecosystem and then extending them further for ours. So, the question that we have, and one of the questions that's meant to be provocative that I'm watching is, how does the UD, how does the design architecture, does it continue to encourage federation among trust bridges? Or does it displace that type of leveraging the private sector for the bridges of trust? I think the answer is both of these things happen at the same time. But it's a fun, provocative question to ask as we move forward.
Now, finally, the third driver, which is challenging for us in the Canadian ecosystem and staggering, is that fraud is our forcing function. We've talked about the numbers for GDP realization many, many times and for years. But now we're talking about a matter of survival as an economy. Fraud is rampant in our Canadian ecosystem.
So, we have $50 billion of fraud, and that's just what was reported in 2025. We have 311% increase in synthetic ID fraud, largely driven by deep fakes and AI as well as other mechanisms. And one in 20 verifications is now reported as fraudulent. In our Canadian ecosystem specifically, Equifax reports that within 2024, fraud jumped from 2.8% to 8%. This is massive and this is staggering in our ecosystem. And that was in credit applications alone.
So, we have massive drivers that we need to move forward and act with haste and a lot that we can learn and share from the European ecosystem. So, let's look at the areas that we can converge in this space. Regulation as a trust anchor. And in some ways, I'm very envious of this for you for your ecosystem. You're moving from proxies toward a coordinated wallet-based approach, 27 members. I recognize those members are taking their own approach as well at the same time.
So, it'll be interesting to see how this space turns out. Within our Canadian ecosystem, we have a consensus-based architecture.
So, we have our pan-Canadian trust framework, the coalition of the willing, public and private way forward. And regulated industry is stepping in at this time, building on the financial regulations to solve the problems around fraud, economy, and using trust bridges. And then if we look at a third actor within the ecosystem, the UK digital verification scheme, also leveraging certification, has 48 providers right from the beginning.
So, we've got three partners, three collaborators here, all kind of leveraging, all moving toward the same goal, but leveraging kind of a different approach along the way for measuring and verifying trust. Now, we put forward that perhaps none of these individual approaches fully maximizes on mandate alone, maximizes economic value, maximizes benefit. We put forward that none of these approaches can scale alone on consensus-based approach. Believe me, we feel this deeply.
So, where are the commonalities? One pattern comes through in looking at these three jurisdictions on their way forward. We have regulatory authority and competitive certification balanced with market pull. These are the three key ingredients that we put forward to moving trust forward on a jurisdictional scale.
So, the question will be, how will we move forward in each area? What will we learn from Europe? What can Europe learn from us? And how can we build global trust together? One thing that we do see for sure is that taking a certification-based approach sends signals into the market. It works in jurisdictions. It works in industries.
So, this is one ingredient to the way forward that we all believe that we can build on. Now, what we're testing and looking forward to testing with you is, which works best for scaling across large economies?
So, we need to still prove how does cross-border federation, cross-border credential mutual recognition work at scale using these pillars and these ingredients on the way forward. So, in our Canadian ecosystem, as you've seen, we have 13 kingdoms, very polite cats who like to say no.
So, we could not mandate. So, because we could not have this national mandate, this nationally regulated approach, we built industry-driven certification. Because we could not mandate from the top down, we built neutral governance that recognizes the co-sovereignty of provinces along with the federal government and the power of industry. We built business problem-solving deployments. Start with the business problem first, follow the deployment next. And we built a public-private consensus-based approach.
So, we didn't take these approaches because we want to. We took these approaches because we had to, because it was inherent to our governance, our culture, and our ecosystem. And these principles are the way forward for us to help us continue to evolve as the space and the technology does continue to evolve as well.
So, let's talk about paths to mutual recognition. And I think the words mutual recognition are doing heavy lifting here.
So, as you can see, one thing I wanted to really drive home with this group is when we think about sovereignty and we think about cross-border interoperability, we do have to recognize that there will be more than one paths on the way forward. And there was an MOU signed between the European Union and Canada in December of 2025. And that MOU found that there were no insurmountable legal or technical barriers.
So, we think that's great news. So, where can we focus on economies and connecting the digital single market and the Canadian ecosystem for the good of all, for the good of the world? We've seen the German wallet, Sandbox, and other instantations, the large-scale pilots. We've seen that controlled testing, funding, and pilots does reduce friction. We also know that the European Union must go forward and prioritize its member states on the way forward on what does progress look like.
At the same time, we see the benefit, and we're very keen to demonstrate how UD wallets can work out of the box with trust signals that are not European, be they from the container called Canada or be they from our provinces, from British Columbia, from Quebec, or Ontario. So, how may we test this functionality?
Well, we have commonalities. We have certification.
We have, in Canada, our consensus framework. In Europe, you have the UD. You have the regulation. We have ways forward.
And so, what we propose is an opportunity for an informal sandbox. And we do have a liaison agreement with organizations like the Syros Foundation. We're actively testing the WW wallet to see where and how we can share credentials in areas like education, workforce upskilling, making sure we have labor mobility and labor enablement.
So, we're open to any and all opportunities to augment and test your wallet and how it can send and receive trust signals into the Canadian national or jurisdictional level, and especially into our economy. Because the fact of the matter is, is that trust is something that is built over time. We know this. It comes from multiple and deliberate interactions in working together as a community. We also know that there is not a single path forward in interoperability and enabling digital trust at scale. There's not a single regulation, not a single standard.
So, it will be the collection of these standards in terms of how we move forward together. And finally, and I really echo Nat in his talk today, I think the most important ingredient that we go through today is you. You who are in this room, you who are virtual, you who watch this talk later, you are the interoperability layer that will move us forward.
You are the people and the organizations who will work collectively and deliberately to advance digital trust that works for our economy, that works for our ecosystem, and to make sure that we can govern this collaboratively as a global community. So, lastly, I do like to have within my talks at least one quote.
So, today I picked Canadian philosopher Marshall McLuhan. He's prescient. If you don't know Marshall McLuhan, please do have a look at who he is and read his works. But in 1965, one of his quotes he said is that there are no passengers on spaceship Earth. We are all the crew.
So, we are all the crew in this room, and we will be the change by working together, by working deliberately to experiment, to learn, and to move digital trust forward that solves problems by protecting privacy, security, and most importantly delivering utility to all of our communities and stakeholders. Thank you so much for joining me. I hope you have a great rest of your conference. Thank you. Great. Thank you so much, Joni. Great to have you back here with us at DIC. We really missed you last year.
So, it's good to have you here in person. Thank you so much. Trying to keep things on track, but a quick question. Digital sovereignty is arguably becoming an economical survival issue, right? Yes.
So, which sectors do you believe will feel that pressure first, and what early warning signs should governments and enterprises be paying attention to right now? Yeah, absolutely. Financial sector, number one. I think that we can't stress enough the amount of fraud that we're seeing in the financial space. We have things to learn from the European ecosystem in that sense.
Secondly, and in fact I would call it a tie, I think I'll call it a workforce sector as a whole. Healthcare sector, tech sector, upskilling. We've talked so much about jobs and AI as your new workforce, so we can't stress enough the need to upskill for the jobs of today, but the jobs that will come tomorrow. Great. Thanks. Once again, everyone, Joni Brennan.
