As Canadians emerge from the COVID-19 pandemic, there is a need for further private sector and government collaboration in building Canadaโs digital economy, Mark OโConnell, President and CEO of Interac Corp., said in a virtual address to the Empire Club of Canada on April 20, 2022.
โCanada is coming out of the pandemic in better shape than we might have expected and with enormous potential to capitalize on the growth of the digital economy,โ OโConnell continued. โThe challenge for us all is how to best do that. How do we both identify and create opportunities for our organizations, for our employees, and for all Canadians?โ
Watch the full speech from Mark O’Connell below.
In looking for new ways to create lasting economic and social value, OโConnell said the answer lies in an apparent paradox:
We must collectively have the courage to preserve and replicate certain hallmarks of our past success as an advanced hybrid digital economy; while immediately embracing a digital-first, data-driven Canadian economy. This is the recipe for innovation and competition that will inclusively benefit Canadians and Canadian businesses for years to come.
Mark OโConnell, President and CEO of Interac Corp.
To achieve this result, the Interac head said Canada needs to first create the right conditions based on a consistent, trusted and standards-based ecosystem for our digital economy that will make more competition and choices possible to the benefit of Canadians and businesses alike.
โBuilding an ecosystem that works starts with correcting the perception that Canada is already far behind or doesnโt have the tools in place to bring new ideas to life. Thatโs simply inaccurate,โ OโConnell said. โIf we examine our history in many technology led sectors, you find that Canada succeeds and leads when we collaborate at platform levels, and then enable the market to create new, competitive solutions accessing those platforms.โ
OโConnell said Canada has decades of success behind us when it comes to a highly accessible, user friendly, and secure digital ecosystem for financial transactions, pointing to our early adoption of ABMs, debit cards and, more recently, peer-to-peer transactions and contactless payments.
โYou can walk into an average grocery store in the U.S. today and see people paying for their groceries by personal cheque. When was the last time you saw that happen here? Canada is leagues ahead of that โ and we have been for a long time.โ
Canada led the world in the provision of this electronic payment technology through cooperation of the nationโs banks, credit unions, merchant acquirers, merchants, and white label ABM processors, OโConnell said.
โA healthy relationship with regulators such as the Department of Finance and Bank of Canada who diligently stayed current on enabling rules and regulations ensured the principles of safety, soundness, and access. It is an โinvest onceโ in a common platform (enabling scale economies), and then compete on top of the platform in whatever respective business its participants were.โ
When it comes to further modernizing the payment experience OโConnell pointed to the recent launch of Interac e-Transfer for Business, work on the Real-Time Rail, or RTR, as well the acceleration of Canadaโs open banking system.
โWith open banking, organizations can turn customerโs financial data โ with their explicit consent โ into more innovative offerings that offer added value and flexibility. Weโre feeling excited about it at Interac. Thatโs in large part because of our confidence in Canadaโs highly qualified new open banking lead. We can not only catch up but lead the world in this area.โ
With expanded access rules on the horizon with the new Retail Payments Oversight Framework and Retail Payment Activities Act, Canada is also updating the regulatory frameworks and access rules to keep pace with our capabilities and market needs.
โAt Interac we applaud this innovation and key role of government to enable more widespread access to our network platforms for fintechs and payment providers.โ
As Canadians are already adopters of digital payments, OโConnell said digital ID will play a major part of how people complete their digital transactions and access other services seamlessly.
Canada is ahead of the game in our digital economy. All of this was possible because Canada was forward looking and set the conditions for market players to innovate and thrive. Now, itโs time to do it again and one of the most exciting opportunities for Canada to lead is through digital identification. This is one particular area where we have a chance to deliver real economic and social value โ if we get going and get it right.
Mark OโConnell, President and CEO of Interac Corp.
โTrusted digital ID will be the foundation for secure, convenient, and inclusive participation in the digital economy. It will underpin not only how Canadians make payments, but how they access government services and conduct business both online and in person moving forward.โ
With developments over the last couple of years, including acquiring an exclusive Canadian licence for SecureKeyโs digital ID capabilities โ such as the Verified.me authentication network โ and 2Keys, a Canadian company with deep expertise in secure identity verification, OโConnell believes Interac now has the capabilities to enable a national digital ID trust network, integrating not only with Interac service offerings, but those of other businesses and government.
โWeโre doing this because we know a cohesive solution made in Canada โ by organizations that intrinsically understand our unique needs โ will ultimately be best. The flip side is a situation in which global โBig Techโ companies are responsible for authentication of Canadians and the exchange of their foundational data. This is something I know many people both in government and the public will have concerns about.โ
Organizations like the Digital ID & Authentication Council of Canada (DIACC), CIO Strategy Council and more are already working together and making strides towards a system that safeguards data, and is inclusive and accessible.
โWe need to keep building on this work while being conscious of the successes we have achieved in areas like payments that can now be applied to digital ID.โ
OโConnell closed his speech by reiterating the urgency for both the private and public sectors to come together in delivering trustworthy, secure, and frictionless digital payment and identification services to all Canadians.
โIf we are to capture this golden opportunity for Canadian competitive advantage, provinces and federal departments must have the foresight to see the big picture value of ubiquity and common standards in our trust network vs regional or departmental fragmentation. That mindset is already in our nature as a country, and weโve seen it work. Letโs lead the world again.”