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On Identity with Debbie Gamble and David Birch

Canadians are increasingly exchanging sensitive data online, highlighting the need to create solutions built specifically for our new way of transacting, working and living. David Birch, author, advisor and commentator on digital financial services joins Debbie Gamble, Chief Strategy and Marketing Officer at Interac, to discuss how secure verification solutions can help reduce the friction of daily life by putting users in control of their digital information.

  • Episode Transcript

    Debbie Gamble: I’m Debbie Gamble, Chief Strategy and Marketing Officer at Interac, and you’re listening to Everyday Trust. We are witnessing a period of accelerated digitization in Canada. With this comes new opportunities and increased efficiencies. It also highlights one of the most important questions innovators face today. How can we give Canadians the confidence they need to participate fully in our emerging digital economy? The answer that I come back to over and over again is trust. Trust unifies our families, our communities, and even the way that we’re governed. Trust can take years to build and a singular moment to break. And in a digital world, the way we build and maintain trust is constantly evolving, and we need to stay ahead of the curve. In this series from Interac, I’m talking to leaders about what trust means to them.

    DG: I’m excited to be talking today to David Birch. In the industry, Dave’s known for making sense of digital identity and digital money. He’s an advisor, a regular contributor to Forbes and Financial World, and the author of books like The Currency Cold War and Identity is the New Money. He also writes one of the most respected fintech blogs and in full transparency, Dave and I have worked together for many years and I’m honoured to call him a friend. Thank you, Dave, for taking the time to speak with us today.

    David Birch: Thank you for inviting me, Debbie. It was lovely. Lovely of you.

    DG: So, Dave, I start these conversations with the same question. How do you define trust? And from your perspective, what does trust mean in the digital economy? And is it different in the digital economy to the physical world?

    DB: Yes. It it is definitely different. Debbie. So, I mean, I’m coming at this from quite a technical perspective. So when when you say trust to me, when I say trust in the sort of the context of the digital economy, I mean something sort of technically quite specific. I mean, basically, you know, liability shift. Like, trust you know, if you want to come and get a mortgage from me, trust means who do I sue if you’re not you? Like, who ultimately’s fault is it if you’re not you? That kind of thing. So I tend to think of trust in that very technical sense. I think that’s quite different from from the sort of casual use of the word trust in general terms. That means a few different things.

    DG: Given the definition you just shared with us, what’s your sense of the current state of trust in the digital ecosystem? Do we have a trust issue?

    DB: I think we have a trust issue from society perspective. I mean, you know, you’ve seen it, you know, throughout the last few years. You have this kind of disintegrating trust in authority and establishment, and to the point where nobody trusts anything. You know, you see things on the web all the time that you’ve no idea whether they’re real or not. So first of all, if you just look at the sort of mechanical measurement of sort of the inverse of trust, What you see is fraud is completely out of control. So you see this absolute explosion in fraud, which is, you know, very damaging. Not just because of the money loss, but because it sort of undermines the whole kind of online economy and moving forward in that sort of area. So you can see there’s a problem there. But there’s also a problem in if you’re trying to if you’re trying to create something new, if you’re trying to start a new business, if you’re trying to start a new service, I just feel we’re so far away from having that infrastructure that we need.

    DG: It sounds like it’s not just a set of opportunities that we’re all kind of looking at for a better experience, but it’s it’s an imperative to solving some of the problems that we have in engagement and specifically digital engagement.

    What’s important when I interact with you online is not that I really know that you’re Debbie, you know, your real name is not important part of the transaction. What’s important is I know that you’re good for the money or you’re over eighteen or you’re a Canadian citizen or you’re a woman or whatever it is that’s necessary to make the transaction take place. So in the old concept, you know, you knew each other individually, and it was your identity that was critical. In the new world, it’s your reputation that’s the crucial thing.

    DG: You brought up, you know, the relationship of trust and reputation, which I think is very important, kind of component of the trust topic. Because reputation is not just the way that, you know, as individuals, we kind of create our persona, but it’s the way business is run. So it’s a key component to the whole kind of trust framework.

    DB: I think in the digital world, you know, we this this idea that, you know, you have to prove who you are. Well, not who you are. You have to prove that you’re allowed to do something. That that will become natural. It will just be the natural way of doing things. You know? But there’s some symmetry there as well. Because when I go to the bank, I need to be able to see that it’s the bank. You know? If my credit card issuer phones me up, I need to see on my phone, it really is there. If I get a message that comes from, you know, some retailers, I need to know it’s really come from them. So it isn’t just about me, getting some sort of digital identity so I can log in and and save money for businesses and government and so on. It’s the whole thing. It’s the whole infrastructure. It’s about people being able to act with confidence in this online environment. And, you know, this is where I mean, to be honest, this is where people like you have a very critical role because you’re one of the few brands that can sort of take that, you know, take that position, that locus. But as I say, I keep saying I’m optimistic in this direction.

    DG: With that in mind and and kind of where we’re going, what what does a smarter approach to identity verification look like, do you think?

    DB: When you say a smarter approach, where that starts me thinking is in the difference between trying to, if you like, digitize identity, trying to take the identity stuff we have now and trying to make digital versions of it to work online. And the more radical approach, which is to say, actually, that hasn’t worked. We’ve spent twenty five years messing around trying to put driving licenses online and this sort of thing. Frauds out of control. That’s clearly not the way to do it. So maybe it’s time to rethink things a bit. Maybe it’s time to think about building digital identities which are fit for the digital economy. And if you start building digital identity from scratch, it looks a bit different. And I’ll give you one straightforward example. If you show your driving license to somebody, your driving license is dumb. It doesn’t know who’s looking at it. It doesn’t know whether they’re allowed to look at any of the data. It doesn’t know which data it needs to give them or which data it needs to hide. It’s not capable of interacting with other driving licenses to check whether they’re real or not. It’s dumb. But a digital identity would be very different. A digital identity would be able to say, you know, why are you asking this? Who are you authorized to ask for this information? What information are you trying to get? But there is a world of difference between the bar saying, are you over twenty one, and the bar saying, how old are you?

    DG: Yeah. You know, our digital reality obviously needs different solutions.

    DB: I tend to view it in sort of three parts, really. There’s, if you like, the identification services, which bind the digital identities to things in the real world, people and companies and stuff like that. That’s me scanning your passport and checking you’re a real person and checking you’ve really got a bank account and all that kind of thing. But then you’ve got the kind of the authentication nexus, which is how do I know it’s you now standing in front of me or logging into me or whatever. And, actually, there’s quite a lot of progress there now. Customers like touch ID and face ID and things like that. They see them as they see them as convenience technologies, really, more than security technologies. But they’re comfortable with that, so we can build on that. And then you’ve got what I there’s the authorization part. So this thing to do with reputation. It’s not about who are you. It’s about what you’re allowed to do. Are you allowed to buy something here? Are you allowed to come in this store? Are you allowed to go through this door? Are you allowed to start this car? You know, that kind of thing. That’s, I think, where the intellectual energy is going at the moment. And that means an ecosystem where you have wallets that can store, you know, these credentials, these identities, as well as storing the sort of tokens of things that you own in this virtual world or metaverse or or something like that.

    DG: Well, and that that kind of brings up the topic of consumer adoption and behavior. So when I think about new technologies becoming widely adopted and what we need to do to have, you know, people and businesses change their habits, I think a lot about the ideas of of certainty and comfort. And certainty from my perspective is the kind of the more scientific approach. It’s in our world, It’s, you know, where the science of architects, engineers, and developers, testers, etcetera, spend many hours on making sure the technology works. It works the same way and it works that way every time. When that’s done well, it’s the comfort that the end user has the feeling of being confident that something is gonna work the way it’s intended to work, the way you expect it to work, that that is when we actually start to embrace the change. What do we need to do to be able to give that flavor of comfort, confidence, and certainty as we’re bringing in these new sets of capabilities that will hopefully make that behavioral change habitual.

    DB: I keep bringing in the kind of anthropological word ceremony into this. If I go to a store in Kazakhstan or Canada, you know, I go up and buy a cup of coffee, and I tap my thing and I walk out. I know exactly what to do. Right? So I take my card out on my phone, and there’s a point of sale terminal, and there’s a little contactless symbol. I tap it, and there’s a beep, and something pops up on my phone, and I’m happy. The ceremony is absolutely it’s the same everywhere. And the thing is there’s a reliable ceremony, and we lack that with identity. And criminals are ruthless in exploiting that. But, you know, some places, they send you a code. Some places, there’s an email. Some places, you have to ring up and punch something in. Some places, you have to put a thing in a little dongle and press it. Some things, you have to do with your foot. There’s no ceremony. It’s all different, and criminals know this. They know consumers don’t know what to expect. And GF in the UK used to be with Microsoft for a long time. He says, you know, just like we got tapped to pay and everyone knew what to do, we need tapped to prove. You know, we need the same ceremony for it. You walk into the bar, you tap it. You know, you go to pick up the car at the rental place. You you just it’s it’s got to get to that point so that we can protect consumers so that when they see something that’s different, they’re they’re, you know, they’re at least raises an eyebrow.

    DG: It’s interesting. And I think, you know, that notion of ceremony, and you also said standards, you know, that, we know working in technology that you need those standards for things to be interoperable. You need them for that experience to be consistent. So to do that, that takes an ecosystem. Right? And so what what’s the role of the different players in our world around an identity ecosystem?

    DB: If we want people to share in the benefits of a of an online always on digital economy, we we have to do something to protect them, and that means some sort of infrastructure because you you can’t just have this kind of wild west caveat mTOR, you know, do your own research, blah blah blah. That you know, that’s good if you if you’re a nineteen year old MIT computer science undergraduate, that might sound good, until your grandma presses the wrong button in an email, and her house now belongs to someone in Vladivostok. But but the point is there’s not really a way to run a society. We we need the infrastructure.

    DG: Well, how do you look at the role of, public sector versus private sector or, you know, as we’re doing in Canada, we’re looking at it as a, you know, hugely important, opportunity for collaboration. But what’s your views on that?

    DB: Well, as a whole, I mean, you know, I’ve said before. I mean, I think this is this is vital national infrastructure. You know? And it needs some sort of government framework, you know, as has been done in Canada and Australia and other places. The UK is just moving in that direction direction now. We’re a little behind you on this. But you need this kind of framework.

    DB: And within that framework, you need private and public sector working together. And I tend to think that the banks have a key role to play in this because, actually, the banks have already done the know your customer hard work. They already have to do the AML work, the anti money laundering. They already have to do the counterterrorist financing screening. They already have to do the politically exposed person screening. Like, they’ve already done all of this identity stuff. There are other people out there that could do something about this. You know, social media in particular has been under a lot of pressure to get its act together about, you know, whether people are under thirteen or over eighteen or whether things that are posted are real or unreal or and you see the thing going on with with Elon Musk taking over Twitter and saying he’s gonna clean the whole thing up and sort out the bots and and and kick out the bad actors. Well, if he could actually do that, you know, then your Twitter identity will become a digital identity that’s a badge of personhood. What I don’t want is to have to use my government ID card to log into everything on the web. That I that’s I really don’t want that to happen. I don’t want the government knowing everything I’m logging into. And and I don’t want everything I’m logging into to know who I am. That not right. You know? That doesn’t get us anywhere in terms of privacy. So, you know, the role for people like Interac to be brokers in the middle of that, I think, is is is quite strong. So Interac isn’t, you know, seen by the average consumer as some crazy technology, crypto, nutcase, fly by night thing. You know? It’s solid depend it’s always there. It works. Everyone’s got a card.

    DG: We believe so. You know, this, at the end of the day, is is all about trust, and I think the notion of ensuring consumers are in control of their data and are comfortable with the privacy and can rely on an ecosystem that can deliver in, you know, in technical terms, those verifiable, exchanges is really what we’re all about. I’d like to kind of, you know, move a little bit into the realm of payments and and digital identity. For the longest time, many of us in the industry have felt the natural synergies between ID, authentication, verification, and payments. So, maybe you could touch on that topic.

    DB: If you solve the identity problem, payments are easy. If you know who all the counterparties to a transaction are, payments are just a bit of messing around on a spreadsheet somewhere. You know? An awful lot of the problems the payment industry has to deal with are actually identity problems, you know, both in sort of straight fraud, but also in terms of just onboarding and, and things like that. So I think if we get the identity problem solved, then that takes a whole bunch of costs out of the payment sector. That makes the payment sector more efficient, lowers the costs, makes it possible for more businesses to go online and do more business that way. You know, a lot of really smart people spend a lot of their time working on anti fraud stuff when they could be creating new products and services instead. So for me, the unshakable, conviction is that if we fix the identity problem, we make things a lot better in payments. And there’s no doubt about that in my mind.

    DG: And and, you know, for many of us who’ve been in the payment space for a long time, in fact, we’re using, you know, some of the philosophies and the technology, and have been in the payment space for a while, including crypto that, you know, many of our our kind of everyday payments are based on. So, you know, we at Interac certainly believe that there are huge synergies there to leverage those capabilities. So when we think about the user, whether it’s a consumer, Canadian in our case, or a Canadian business, what are the advantages of a verification, authentication, identity set of capabilities? What kind of opportunities are there if we get this right?

    DB: You’ve got the low hanging fruit around things like proof of age and so on for alcohol, things like that. So I’m not just thinking about mainstream things like, can I get a bank account? How old am I? It’s also like, where are the tough problems that need solving, where digital identity can make a real difference, to some of these people? So and then you’ve got the sectoral stuff like travel and health care and all these kind of things where, you know, you do see massive inefficiencies, which if there were harmonized digital identities in those sectors, you could imagine, you know, great great savings there. You’ve got the special case of government as well where, you know, it’s certainly it’s certainly easiest things to be able to have a digital identity to access all government services. And for many people, that possibly might be their starting point. Although it’s interesting, and then, again, I know this is a topic that you and I have discussed before, but there’s also this thing about local and state and federal government as well. I mean, a lot of people’s daily interactions are actually with local government, you know, booking a swimming pool or trying to find out when the trash is supposed to be collected and things like that. So we it it shouldn’t all be about driving licenses and passports. It should also be about making people’s day to day lives easier.

    DG: I think what you’re getting at is is kind of the broad variety of use cases here. There’s obviously operational efficiencies. There’s definitely opportunities to enhance security. Certainly from our perspective, the necessity for a trust framework is not just that we can solve some of those problems that are gonna rely on some kind of verifiable authentic engagement, but that are also gonna allow us to be more inclusive and, more relevant to societies, not just problems, but the opportunities that some of these new solutions are gonna enable us to tap into.

    DB: I mean, inclusion is a very important word in this, I think, Debbie, because, you know, we want to make sure that we, as a responsible members of an industry, we want to make sure that the benefits of this shift to digital are shared. And and right now, there are people that are excluded from the online economy and not able to take advantage of some of the opportunities. And that that that isn’t quite right.

    DG: Thinking about that, you know, if we start to move into the future, and and what the future might hold, What role, if any, does verification play, in some of these new capabilities and new technologies?

    DB: I am convinced that by far the most important attribute in the future will will simply be that you’re a person, not who you are, not just that you’re a person. And simply being able to go and log in and the system knows you’re a person, that would be a great start. So first of all, when you talk about the metaverse, the metaverse that people are imagining now, these kind of immersive virtual worlds where people will do real business, That it’s inconceivable without digital identity. Digital identity is the missing part of all of that. And no one’s gonna let their kids go into a metaverse where anybody could be, yeah, in there. No one’s gonna do business with someone who you can’t you can’t establish their credentials and so on. So I see those things. I mean, they have the same problems. They still need the same solutions, but, actually, they do bring new energy into the space.

    DG: Certainly kind of an interesting opportunity for us to help define the future and figure out how we can solve some of the problems that we’re faced with today. And in addition to some of those topics, what signals are you keeping your eye on? You know, what are the things that you’re looking to for the next five years or so?

    DB: I I very lazily summarize things as as blockchains, biometrics, and bots. So I don’t really mean blockchains. I mean, distributed ledgers, blockchain is the word that everyone else uses, however inaccurate. But but there is something interesting in the decentralized finance space, building on distributed ledgers. So there’s the distributed ledger stuff, decentralized finance. By the way, one of the aspects of that, which I think is a little bit overlooked sometimes, is the whole transparency aspect of that, and that feeds into your trust point as well. So there’s so there’s boxes of biometrics. I think the continuing advances in both active and passive biometrics deliver simultaneously convenience and security. And this idea that the phone knows how you hold the phone and how you type and how you carry it and how you walk around. And so, basically, you don’t need to like, the phone knows it’s you. And then bots, I think, like a lot of people, there’s great advances in machine learning, artificial intelligence. I agree with a lot of some of the more radical thinkers in this space who have certainly convinced me that we’ve underestimated the impact of artificial intelligence and quite how much it will shake up all industries. But in particular, in the finance industry, we haven’t really looked at what happens when the consumers get the AIs. We’ve tended to focus on

    DG: And the other way.

    DB: Yeah. So the bank has AI, and it uses it to do chat bots and great customer service and mass customization. But but Apple and Google and Mike, they’re gonna put AI into consumers’ hands. And I think we’re a long way from understanding the implications of that yet. So, yeah, so I know it’s a bit of a trite there, but, yes, the three b’s, blockchains, biometrics, and bots.

    DG: Love it. To close our conversation, with what we’re thinking about, trust and and where that really falls, I’ve got a handful of rapid fire questions for you. Trust is just another word for:

    DB: Liability.

    DG: Second one, the most trustworthy person I know is?

    DB: My my my wife is by far and away the most trustworthy person I know. But, but in sort of public life oh, god. Let’s let’s go with Gareth Southgate, the England manager. They should install him as the prime minister of an in an interim multiparty government until until such time as things improve.

    DG: And the third one, what’s the one thing an organization could do to quickly earn your trust?

    DB: That goes to that transparency point, actually, Debbie. I think radical transparency in organizations is is what’s gonna is that’s the next generation of trust looking forward.

    DG: Thank you, Dave. Thank you for speaking with us today and for such, as always, enlightening conversation

    DB: Oh, it’s lovely to talk to you, Debbie. See you soon.

    DG: Trust in the digital economy can be viewed as the next generation of trust. Canadians deserve to have control over their personal information in a secure way. This was reinforced throughout my conversation with Dave. In fact, research from Interac shows nearly 8/10 Canadians surveyed are worried about protecting their online privacy. And more than half believe organizations are primarily responsible for protecting their personal information online. As we’ve learned today from Dave Birch, it’s not just about sharing your data. It’s about reputation, which becomes a key component as we live our lives online. This generation of trust operates both ways, both for the consumer and for financial institutions, businesses, and any other organizations across Canada. As we move forward, it’s clear we need a smarter approach so we can transact with confidence in our digital world. And as Dave says, it’s more than translating an analog system to a digital version. We need a new infrastructure that offers two way trust every single time. If we accomplish this, we can build a safer world, a more inclusive world, and a world that is easier for everyone to navigate. Thank you for listening to Everyday Trust. If you found this conversation valuable, please take a moment to subscribe to the show and rate and review us on Apple Podcasts, Spotify, or wherever you get your podcasts.