Statistics favor UK’s digital business ID but the country is lagging: Umazi

Setting up a business in the UK is a “hidden nightmare,” according to a new survey of small and medium enterprises (SMEs). Nearly a quarter of respondents estimated that it took them a total of 27 hours and over four weeks to set up operations. Some even said it took them over a year.

A solution to this could be digital business identity, which could also solve a number of other Know Your Business (KYB) issues, such as accessing funding, fighting fraud and choosing partners and suppliers, according to digital ID and compliance platform Umazi, which conducted the survey. Many SMEs seem to agree.

The highly manual process of verifying a business in the UK takes valuable resources from small businesses, the report argues. Ninety percent of respondents say that the verification processes for setting up a business were needlessly repetitive. Aside from starting operations, many SMEs also report difficulties with access to funding due to lengthy onboarding and lending processes.

A vast majority of survey takers, 95 percent, say that a digital identity vault would simplify or accelerate the funding journey. Another 88 percent believe that a universally recognised “trust stamp” would be a useful tool for confirming that the business is trustworthy. The same percentage said that a digital business identity would help in the selection and due diligence process for partners and suppliers.

Nearly 70 percent of businesses are concerned about data and identity theft. However, almost 30 percent of respondents said that they do not ask for any documents to verify a potential business partner or supplier, choosing simply to rely on recognized industry names.

The practice rings alarm bells as criminals have been impersonating businesses and setting up fraudulent entities, warns Cindy van Niekerk, founder and CEO of Umazi.

“Our research highlights the urgent need for a digital company identity framework that enables fast, trusted, and interoperable verification across sectors,” she says. “This is not just a fraud issue – it’s a barrier to growth, efficiency and economic confidence.”

The survey responses were collected from 500 UK-based SMEs in the financial, legal and technology services industries, including accountancy firms, law firms, and tech and fintech start-ups. The insights were published in Umazi’s whitepaper titled “Broken ID, Broken Growth: The UK’s Verification Chokehold.”

The London-headquartered firm offers a decentralized corporate identity wallet that allows businesses to store and share verified credentials. It is also part of the Centre for Finance,

Innovation and Technology (CFIT)’s initiative to create a Digital Company ID in the UK. The initiative involves over 70 organizations, including financial services providers, public sector organizations and regulators, and biometric technology providers such as Daon, Yoti and OneID.

Earlier this year, CFIT published its own research on fighting economic crime through digital verification, estimating that around half of the cost associated with KYB compliance processes and verification can be saved with Digital Company ID while onboarding can be made 60 percent faster. Financial institutions could also save £1.7 billion (US$2.2 billion) in compliance costs per year.

“We need a system that works across industries, enabling businesses of all sizes to establish trust quickly and efficiently,” says van Niekerk. “Right now, the verification process is fragmented and inconsistent, creating unnecessary delays and exposing businesses to risk.”

The founder has offered other arguments in favor of the plan, including enabling businesses to start trading faster, in turn generating revenue and boosting the UK’s economy.

“Unlike the EU, the UK is behind on the innovation, lacking an effective strategy for – and roadmap to – company ID and it is our belief that if the UK is to remain a competitive and an attractive place to set up a business, then this must be addressed, and at speed,” says van Niekerk.

Article Topics

Digital Company ID  |  digital ID  |  fraud prevention  |  identity verification  |  KYB  |  KYC  |  UK  |  Umazi