CFIT pushes efforts on digital company ID to tackle economic crime in the UK

The UK’s Centre for Finance, Innovation and Technology (CFIT) has unveiled progress by its coalition of financial institutions, regulators, and technology companies in developing a digital ID for companies that can be used to reduce economic crime and streamline business operations. The initiative aligns with UK government estimates that widespread use of secure digital identities could add £600 million (roughly US$758.8 million) annually to the economy.

CFIT’s coalition is working on a model for a digital company ID, and details its progress in a white paper titled: “Fighting Economic Crime Through Enhanced Verification.” The coalition is comprised of over 70 organizations including Amazon Web Services, A&O Shearman, Barclays, CRIF, Dun & Bradstreet, Ernst & Young, HSBC, Lloyds Bank, Mastercard, Revolut, Santander, Monzo and Visa, as well as regulators such as the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR). It also includes the Global Legal Entity Identifier Foundation (GLEIF), which recently published an extension of the ISO standard for legal entity identifiers (LEIs).

Biometrics at the center

Biometric technology providers have also been integral to CFIT’s plans, with companies like Yoti, Experian, OneID and LexisNexis Risk Solutions contributing knowledge in digital identity and verification systems, essentially aligning with CFIT’s goal of embedding verification technologies to deter fraud and bolster trust in the financial system.

The model of onboarding and KYB (know your business) checks outlined in the white paper specifies that the digital ID will contain data to enable identity verification of individuals like ultimate beneficial owners (UBO) and to check the company against anti money-laundering (AML) databases.

While further details will be revealed when the blueprint for Company ID is published, the coalition plans to align it with the UK’s Digital Identity and Attributes Trust Framework (DIATF).

Potential to combat fraud

Research conducted since CFIT’s coalition launched highlights the potential of digital company IDs. The organization notes that it could significantly reduce fraud, lower compliance costs for financial institutions, and contribute to the development of a secure smart-data economy.

The coalition’s efforts have received backing from the Chancellor, who recently acknowledged the initiative in the National Payments Vision, a strategic blueprint for the UK financial sector. The Chancellor pledged to review the findings from CFIT’s work, expected to be published in March 2025.

“Economic crime remains a major threat to the UK’s economic security, and has a profoundly distressing impact on consumers and businesses. At CFIT, we are committed to addressing this and making the financial services industry more robust against fraud,” says CFIT Chair Charlotte Crosswell OBE.

“The dynamic elements of Smart Data and Digital ID, along with cross sector interoperability, have been key to the success of the coalition to date and demonstrate a further milestone in CFIT’s mission to boost economic growth through financial innovation.”

Elyn Corfield, CEO of Business and Commercial Banking at Lloyds Bank, noted the advantages for small businesses: “Digitizing compliance checks will streamline processes for SMEs, making it easier to secure finance while enhancing the fight against financial crime.”

Such tools would make it harder for fraudsters to exploit the system by enabling real-time verification of business identities.

“Financial crime continues to be one of the most prevalent crimes in the UK, which is why cross industry collaboration is vital to protect consumers, businesses and the overall economy. The proposed digital verification framework demonstrates the power of technology in protecting the financial system and customers, whilst supporting UK economic growth,” adds NatWest Group, head of financial crime risk management and deputy group MLRO, Phalé McMillan.

Article Topics

biometrics  |  Centre for Finance Innovation and Technology (CFIT)  |  digital identity  |  financial crime  |  fraud prevention  |  identity verification  |  Legal Entity Identifier (LEI)