The Role of SIN:
Canada’s Identity Problem Is Getting Harder to Ignore

Today’s Canadian Lenders Association Risk Roundtable gathered more than 50 companies from across the risk spectrum, including banks, non-bank lenders, credit bureaus, fintechs, fraud and identity specialists, and technology providers. One issue kept returning to the centre of the conversation: identity. At a moment when governments are making crime and fraud a priority, Canada has an opportunity to modernize the responsible use of the Social Insurance Number as a supplementary identity-matching tool. Done properly, this is not simply an industry fraud initiative. It can deliver something politicians should care deeply about: measurable reductions in fraud and identity errors, while making it easier for legitimate borrowers to access credit.

Today’s Canadian Lenders Association’s Risk Roundtable gathered more than 50 companies from across the risk spectrum, including banks, non-bank lenders, credit bureaus, fintechs, fraud and identity specialists, and technology providers.

The conversation ranged from credit risk and consumer-driven banking to AI, mortgage stress and the regulatory environment. But it kept returning to a theme I have written about before: identity, and specifically the role of the Social Insurance Number in helping Canada fight financial fraud. There is a reason this issue deserves renewed attention now.

Governments are increasingly focused on crime, fraud and financial integrity. Ottawa is developing a National Anti-Fraud Strategy and putting greater attention on the infrastructure required to prevent and detect increasingly sophisticated financial crime.

This creates an unusual policy window. If governments want to show Canadians that their focus on fraud is producing meaningful results, identity is one of the places to start.

This Is a Fraud Issue. It Is Also a Borrower Issue.

The Social Insurance Number was never designed to be Canada’s universal identity credential. Nor should it become one. The CLA is not advocating for SIN to replace KYC, AML controls, document verification, biometrics or the other tools financial institutions use to establish identity. Our argument is much narrower. Allow regulated financial institutions to use SIN, with appropriate safeguards, as a supplementary identity-matching attribute. That distinction matters.

Consider something as simple as two people with the same name living at the same address. Or consumers with similar names, changing addresses and overlapping information in their credit histories. Sometimes the challenge is not determining whether a document is authentic. It is determining whether this John Smith is actually the John Smith represented by this credit file. That is where SIN can help.

For politicians looking at this issue, this may be the most important part of the argument. Better identity matching does not only protect banks and lenders. It can produce a measurable benefit for the borrower. When identity matching fails, legitimate consumers can face additional verification, delays, incorrect credit-file associations and potentially an incorrect credit decision.

We spend considerable time worrying about the fraudster who gets through the front door. We should be equally concerned about the legitimate Canadian who cannot get through it. That makes identity infrastructure part of the access-to-credit conversation.

And unlike many large policy reforms, the impact should be measurable. Working with lenders and Canada’s credit bureaus, we can track whether better identity matching reduces mismatches, unnecessary manual reviews and fraud while improving the ability of legitimate borrowers to be accurately connected to their credit histories.

Less fraud. Fewer identity errors. Less friction. Better access to legitimate credit. Those are outcomes that government can measure and borrowers can actually feel.

The Government Has Already Defined the Problem

Government does not need to be convinced that fraud is a problem. The policy conversation has already moved there. The more important question is whether the tools available to regulated financial institutions are keeping pace with the threat.

Synthetic identity fraud is getting better. AI is making impersonation easier. Fraud can increasingly be attempted at a scale and speed that would have been difficult to contemplate only a few years ago. It would be an odd outcome if Canada strengthened fraud enforcement and built a broader anti-fraud framework while simultaneously making it more difficult for regulated institutions to accurately determine who they are dealing with.

Enforcement matters. But preventing the fraudulent identity from entering the financial system in the first place is considerably better.

Consumer Protection = Both Privacy + Accuracy

There are legitimate concerns around SIN. Canada has spent decades discouraging unnecessary collection of the number. That caution has merit.

There is also a legitimate concern about function creep: permit SIN to be used for one additional purpose and eventually it becomes an identifier for everything.

That is precisely why the rules should be narrow. Define which regulated institutions can use it. Define the permitted purpose. Establish appropriate security and retention requirements. Prohibit unrelated uses. Maintain existing KYC and AML obligations. This is not an argument for more access to Canadians’ information. It is an argument for more accurate use of an identifier that already exists.

Privacy protects consumers. Accuracy protects them too.

There Is a Political Opportunity Here

Fraud is one of those relatively rare issues where the interests of government, industry and consumers are closely aligned. Canadians want fewer scams and less identity theft. Governments want to demonstrate that their focus on crime and fraud is producing results. Financial institutions want to stop fraudulent borrowers before losses occur. And legitimate borrowers want a financial system that recognizes them accurately and does not create unnecessary obstacles to accessing credit.

Win, win, win … That creates an opportunity for political leadership.

Many financial-sector reforms take years before their effects become visible to ordinary Canadians. This one offers the possibility of something more immediate and concrete. If government works with lenders, credit bureaus and other participants to establish a carefully governed framework, we should be able to measure whether stronger identity matching reduces fraud, reduces identity errors and improves the experience of legitimate borrowers.  That means there is an opportunity to move from an announcement about fighting fraud to evidence that something actually changed.

Before the next election, government should be able to point to meaningful results for borrowers. That is a political outcome worth pursuing.

The Risk Is Moving Faster Than the Policy

What was particularly striking at today’s Roundtable was how quickly the different risk conversations began to collide.

Synthetic identity. AI. Consumer-driven banking. Credit underwriting. Fraud. Data sharing. These are no longer separate conversations. Consumer-driven banking will make financial data more portable. AI will increasingly participate in underwriting and financial decision-making. Agentic systems will increasingly interact with consumers and financial institutions. Meanwhile, the technology available to manufacture identities and attack financial institutions continues to improve.

All of those systems eventually encounter the same fundamental question: Who is on the other side of the transaction? If we cannot answer that question reliably, everything built on top of it becomes more fragile.

The fraud is getting more sophisticated. The technology is moving faster. The federal government is focused on crime and fraud. And the lending industry increasingly has the data and expertise required to demonstrate both the problem and the results of fixing it.

That combination does not come along often in public policy.

There is an identifiable problem. There is a practical intervention. There are appropriate guardrails. And there are outcomes we can measure. Most importantly, those outcomes extend beyond the financial institutions themselves.

A stronger identity framework can protect the Canadian who has had their identity stolen. It can help prevent an innocent consumer from being associated with someone else’s credit history. It can reduce unnecessary friction for legitimate applicants. And it can make it harder for sophisticated fraudsters to manufacture their way into the financial system.

The goal is not to make it easier to collect information about Canadians. It is to make it harder to pretend to be one.

Five Key Points

1. The timing matters. Governments are focused on crime and fraud, creating a genuine policy window to modernize Canada’s identity infrastructure.
2. SIN should supplement KYC, not replace it. The CLA is advocating for narrowly governed use of SIN as an additional identity-matching attribute by regulated financial institutions.
3. This is about borrowers as much as fraudsters. Better identity matching can reduce credit-file errors, unnecessary verification and friction that can prevent legitimate consumers from accessing credit.
4. The results can be measured. Lenders and credit bureaus can help quantify changes in fraud, identity mismatches, manual reviews and borrower outcomes, giving government tangible evidence of progress.
5. There is an opportunity to demonstrate results before the next election. Rather than another long-term strategy whose impact is difficult for Canadians to see, identity modernization offers government the possibility of delivering measurable improvements in fraud prevention and borrower experience.

For more information on the Canadian Lenders Association’s SIN advocacy, or to participate in the CLA’s work on identity and fraud, contact Dean Velentzas, Head of Policy, at dean@canadianlenders.org.

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