The Canadian Bankers Association (CBA) is driving banks to move towards what it calls a “federated model” of digital IDs replacing outmoded paper models throughout the country’s financial system.
The new system suggested would link links federal and provincial systems and allow user identities to be authenticated electronically. Canada’s six largest banks have also been collaborating with SecureKey Technologies Inc for the past two years on a blockchain-based system called Verified.Me, which is now seen as one potential solution for making the switch for paper to digital a simple and efficient one.
Neil Parmenter, CBA’s CEO, wants to unlock what he calls the “full potential” of banking in Canada, arguing:
“We should be open to innovative identity verification methods like document review through a live video connection, use of blockchain, biometrics and other methods that have begun to see widespread adoption in other parts of the economy.”
CBA, which represents more than 60 domestic and foreign banks operating in the country, is looking at viable solutions to updating its current security systems in consultation with Canada’s Federal Finance Department. Its suggested form of “open banking” would allow financial data sharing with other companies and banks.
Last year, a paper released by the Bank of Canada brought forth a positive argument for the implementation of central bank digital currencies (CBDCs). Published on 26 July 2018, the paper written by the bank’s Senior Economist in the Funds Management and Banking Department, Mohammad R Davoodalhosseini, went into great detail to emphasize the potential economic welfare gains that a CBDC could have for both Canada and the United States.
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