Some of the UK’s biggest financial institutions, from both the traditional and challenger sectors, have joined a government-backed anti-crime initiative.
Established earlier this year, the coalition has been tasked with using data-derived research and solutions to develop enhanced digital verification. Data will chiefly be provided by Lloyds Bank, NatWest Bank and Monzo, which will work together on a digital corporate ID proof of concept test. The test may see accounts offered to potential criminals.
Alongside Lloyds, NatWest and Monzo, Revolut, Santander, Barclays, Mastercard and HSBC are among the companies to join the ID verification initiative chaired by the Centre for Finance, Innovation and Technology (CFIT).
These banking and payments firms have been joined by the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) regulatory bodies. Also participating are tech firms like Amazon Web Services (AWS), credit reporters CRIF, Experian and legal firms GLEIF and A&O Shearman, among others.
“We are eager participants in the new CFIT coalition, and I am delighted to see that fraud mitigation lies at the heart of its work,” remarked Elyn Corfield, Lloyds Banking Group CEO, Business and Commercial Banking.
“At Lloyds we recognise that digital verification has the potential to help protect businesses and consumers, and the important work to drive down fraud can only be tackled through cross-industry collaboration. We support CFIT’s mission and look forward to working with it on this key initiative.”
Various financial stakeholders have been becoming increasingly wise to the possibilities of digital verification, in line with the rising digitisation of finance and day-to-day life in general.
Some firms have been actively developing such solutions for some time – the above-mentioned Yoti, for example, is a prominent digital ID producer, including working on official UK government IDs like the Citizen Card.
Digital ID is also catching regulatory attention. At the EU level, European legislators have been probing the possibility of an EU digital ID. Closer to home, the UK Labour government – despite not indicating this in its election manifesto two months ago – has mapped out plans for digital ID in its finance innovation bill.
“We share CFIT’s mission to counter economic crime and enable trade to flourish across the UK,” said Rory Tanner, Revolut Head of UK Government Affairs.
“It is vital that the coalition’s solutions are empirically sound and fully tested to ensure that they deliver the protections that businesses across the UK need to succeed.
“Revolut is committed to providing this and working with its coalition partners to bring the planned solutions to fruition.”
For CFIT, the initiative forms part of its wider agenda around Open Finance. One of the organisation’s chief tasks is to facilitate the continued growth and option of Open Banking in the UK, and by extension Open Finance.
To achieve this, the UK will need to step up its data-sharing capabilities. This has also been the subject of the CFIT coalition, which is chairing an industry-led Open Finance taskforce to identify commercially viable approaches for incentivising businesses to securely share financial data.
The final blueprint of the digital ID report is planned for publication in March 2025. It is hoped that the paper will feature recommendations for how UK institutions can implement a digital verification solution.
Ezechi Britton MBE, CFIT CEO, said: “I am delighted that so many leading companies will be uniting to combat fraud, which can have a devastating impact on businesses and place immense stress on individuals.
“Their technical knowledge and expertise will empower CFIT to produce effective solutions that will protect organisations and consumers and make the UK economy more resilient.
“We look forward to supporting the new Labour government in delivering on its manifesto pledge to combat economic crime and drive economic growth.”
