Monthly Archives: February 2025

Advancing and Evolving Digital Trust in the Finance and Regulatory Sectors

February 11, 2025

Current Landscape

The finance and regulatory sectors are undergoing rapid digital transformation. While the industry pioneers new technology and moves away from conventional platforms, it faces rising fraud, privacy breaches, and growing consumer skepticism fueled by misinformation, disinformation, and challenges verifying information in an AI-driven world.

When Finance Canada’s Electronic Task Force for Payments System Review created DIACC in 2012, its goal was to unite public and private sector partners to develop a secure digital ecosystem. This goal remains, but the need to support a future-focused ecosystem underpinned by verification and authentication is more urgent than ever.

By prioritizing digital trust, Canada can secure its financial systems and enhance competitiveness in the global economy. Interoperable frameworks like the DIACC Pan-Canadian Trust Framework™ (PCTF) ensure systems remain resilient, adaptable, and trusted.

Advancing and Evolving Digital Trust in the Finance and Regulatory Sectors

  1. Strengthening Economic Competitiveness and Growth

Preventing fraud and building consumer trust are economic imperatives. Fraud costs taxpayers and businesses millions annually, and to ensure Canada remains competitive, we must adopt robust digital trust solutions to reduce fraud’s financial and operational impact. Adopting the right measures will also help Canada attract international investment, foster innovation in financial services, drive growth, and create jobs.

  1. Enhancing Trust Through the DIACC PCTF to Complement KYC and AML

DIACC encourages its members in finance and payments to adopt the PCTF as a tool to:

  • Complement Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations by enhancing remote customer onboarding;
  • Authenticate identities with trusted verification systems to reduce fraud in online transactions, digital wallets, and mobile banking; and
  • Improve regulatory reporting efficiencies by using verifiable credentials for entity identification.

The PCTF is a critical resource for advancing interoperability, which supports trusted cross-institutional collaboration and strengthens the financial ecosystem.

  1. Fostering Consumer Autonomy and Addressing Misinformation

Public skepticism fueled by misinformation and disinformation creates friction in adopting digital financial platforms. To tackle this, we can do the following:

  • Respect consumer autonomy: DIACC advocates for voluntary digital solutions that preserve traditional verification methods while offering enhanced, secure options.
  • Promote digital literacy: Educational campaigns can strengthen consumer confidence by helping Canadians identify trustworthy institutions.
  • Use “trust signals”: Institutions should adopt trust signals, such as verified logos or PCTF certification badges, to reassure customers of secure practices.

These efforts respect the diverse preferences of Canadians while promoting confidence in digital services.

  1. Proactive Fraud Prevention and Responsible Innovation

Fraud prevention is not just about mitigation—it’s about staying ahead. To reduce incidents such as mortgage fraud and title insurance scams, we must:

  • Adopt an approach that complements existing client identification methods and includes verifiable credentials, mobile driver licenses and trust registries; financial institutions should integrate DIACC PCTF-aligned solutions to strengthen borrower identification and secure digital proof of ownership.
  • Leverage responsible AI for risk detection — fraud prevention measures must include responsible AI and real-time analytics to detect anomalies, mitigate risks, and reduce operational costs.
  1. Open Banking and the Future of Finance

The government’s commitment to open banking presents opportunities for financial innovation and introduces risks without secure digital trust frameworks. DIACC’s members are encouraged to:

  • Use the PCTF to establish interoperable risk management practices, ensuring trusted data sharing across institutions.
  • Mitigate risks in consumer-permissioned data sharing by implementing robust verification systems that prioritize data privacy and transparency.
  • Align with global open banking standards to ensure Canadian institutions remain competitive and attract international investment.

Open banking offers an opportunity to empower Canadian consumers and small businesses while strengthening the role of domestic innovation on the global stage.

Best Practices and the Way Forward

  1. Enhance Digital Trust with Emerging Technologies

Canada must adopt emerging technologies to stay globally competitive. Financial institutions can use verifiable data and responsible AI to enhance fraud detection, wallets, credentialing, and compliance.

  1. Collaborate for Global Competitiveness

Collaboration with international regulators and organizations is essential for aligning Canadian frameworks with global norms, enabling secure cross-border transactions and strengthening Canada’s financial ecosystem.

  1. Educate and Empower Through Advocacy and Metrics

DIACC is committed to educating Canadians on digital literacy and trust while addressing inclusivity challenges, including:

  • Hosting sector-specific workshops and certifications to promote best practices in digital trust.
  • Amplifying simple, real-world use cases to demonstrate the benefits of digital trust solutions, such as fraud reduction and consumer empowerment.
  • Advocating for enhanced regulations prioritizing secure transactions and privacy while preserving consumer choice.
  • Publishing annual metrics on fraud prevention and consumer trust improvements to ensure transparency and accountability.

Conclusion

The finance and regulatory sectors urgently need services with interoperable assurance and trust to meet the growing demands of digital transformation.

By working together, we can:

  • Educate citizens to strengthen digital literacy while addressing inclusivity challenges.
  • Amplify the role of governments and domestic and world banks in strengthening trust.
  • Determine how governments and organizations can best leverage the DIACC Pan-Canadian Trust Framework to complement KYC and AML regulations, build assurance, and mitigate risks for the benefit of all Canadians.

Through education, collaboration, and the strategic use of trusted solutions, we can solidify Canada’s position as a global leader in the digital economy while safeguarding trust, privacy, and economic opportunity for all Canadians.

Download available here.

DIACC-Position-Digital-Trust-For-Finance-and-Regulatory-Sectors-ENG_v1.1

Request for Comment & IPR Review: PCTF Law Society Profile and PCTF Glossary

This review period has closed as of March 20, 2025.

Notice of Intent: DIACC is collaborating to develop and publish the Law Society Profile of the Pan-Canadian Trust Framework (PCTF) to set a baseline interoperability of identity services and solutions used in the legal sector. During this public review period, DIACC is looking for community feedback to ensure that the conformance criteria is clear and auditable.

Accompanying this review period is the PCTF Glossary that has been updated to reflect all current terms and definitions found across the suite of PCTF documentation.

To learn more about the Pan-Canadian vision and benefits-for-all value proposition please review the Pan-Canadian Trust Framework Overview.

Document Status: These review documents have been developed by members of the DIACC’s Trust Framework Expert Committee (TFEC) who operate under the DIACC controlling policies and consist of representatives from both the private and public sectors. These documents have been approved by the TFEC for public comment.

Summaries:

The PCTF Law Society Profile is the first industry-focused profile of the PCTF and is intended to help regulated lawyers make informed decisions on how best to adopt digital trust services and solutions for things like remote client verification and fraud reduction.

The PCTF Glossary provides definitions and examples for terms that appear across DIACC PCTF documentation, to ensure all stakeholders have a shared and consistent understanding of terms used in the context of the PCTF. As terms and usage can vary across industry, the Glossary is recommended reading for anyone wanting a strong baseline understanding of the PCTF.

Invitation:

  • All interested parties are invited to comment

Period:

  • Opens: February 3, 2025 at 23:59 PT | Closes: March 20, 2025 at 23:59 PT

When reviewing the Law Society Profile Conformance Criteria, please consider the following and note that responses to this question are non-binding and serve to improve the PCTF.

  1. Would you consider the Conformance Criteria as auditable or not? That is, could you objectively evaluate if an organization was compliant with that criteria and what evidence would be used to justify that?

Review Document: PCTF Law Society Profile

Review Document: PCTF Glossary

Intellectual Property Rights:

Comments must be received within the comment period noted above. All comments are subject to the DIACC contributor agreement; by submitting a comment you agree to be bound by the terms and conditions therein. DIACC Members are also subject to the Intellectual Property Rights Policy. Any notice of an intent not to license under either the Contributor Agreement and/or the Intellectual Property Rights Policy with respect to the review documents or any comments must be made at the Contributor’s and/or Member’s earliest opportunity, and in any event, within the comment period. IPR claims may be sent to review@diacc.ca. Please include “IPR Claim” as the subject.

Process:

  • All comments are subject to the DIACC contributor agreement.
  • Submit comments using the provided DIACC Comment Submission Spreadsheet.
  • Reference the corresponding line number for each comment submitted.
  • Email completed DIACC Comment Submission Spreadsheet to review@diacc.ca.
  • Questions may be sent to review@diacc.ca.

Value to Canadians:

The DIACC’s mandate is to collaboratively develop and deliver resources to help Canadians to digitally transact with security, privacy, and convenience. The PCTF is one such resource and guides the digital trust and identity verification ecosystem interoperability by putting policy, standards, and technology into practice aligning with defined levels of assurance. The DIACC is a not-for-profit coalition of members from the public and private sector who are making a significant and sustained investment in accelerating Canada’s Identity Ecosystem.

Context:

The purpose of this review is to ensure transparency in the development and diversity of a truly Pan-Canadian, and international, input. In alignment with our Principles for an Identity Ecosystem, processes to respect and enhance privacy are being prioritized through every step of the PCTF development process.

DIACC expects to modify and improve these Recommendations based upon public comments. Comments made during the review will be considered for incorporation into the next iteration and DIACC will prepare a Disposition of Comments to provide transparency with regard to how each comment was handled.