UK Treasury to prepare guidance for digital ID in AML

The UK’s Treasury will release guidance on the use of digital IDs for identity verification in anti-money laundering (AML) regulations. The guidance will be published with the help of the Department for Science, Innovation and Technology (DSIT), the agency overseeing the Office for Digital Identities and Attributes (OfDIA).

The news was announced on Monday as part of the Treasury’s response to a public consultation on improving the country’s money laundering regulations (MRLs). In the document, the government pledges to ease compliance with identity verification requirements in the MLRs, including by encouraging the uptake of digital ID technologies.

“In line with feedback from the consultation, this guidance will provide clarity on the definition of a digital identity, and give further detail on how digital identities can be used in line with the MLRs’ risk-based approach,” says the document.

The guidance will also clarify how anti-money laundering regulation interacts with the UK digital identity and attributes trust framework, governed by the newly introduced Data (Use and Access) Act. The Act establishes digital ID standards and a register of digital ID services certified against these standards.

“The certification process is recognised by the United Kingdom Accreditation Service, and means that certified digital identity services are subject to regular audits,” says the document. “This meets respondents’ asks from the MLRs consultation to set up government accreditation and standards for digital identity technologies.”

The announcement was welcomed by trade association TechUK, which described digital IDs as a “missing link” in the UK’s approach to AML.

“While the intent is clear and welcomed, implementation will be key,” says the group. “The voice of industry must be heard to ensure that this guidance delivers real-world value, and acts as another step of many towards opening more areas of the economy to the use of digital ID.”

The UK’s 2024 Financial Services Growth and Competitiveness Strategy predicts that adopting digital ID could boost the economy by £4.3 billion (US$5.8 billion) by 2034 through a reduction of fraud and compliance costs.

Meanwhile, the UK is also hoping to fight fraud with identity on other fronts.

Only 3 percent of companies performed ECCTA ID verification: Survey

According to the UK’s Economic Crime and Corporate Transparency Act (ECCTA), all directors, persons of significant control (PSCs), and company filers must verify their identity over a 12-month phase-in beginning in autumn 2025. However, only 200,000 out of an estimated 7 million of them have performed the ID verification — a mere 3 percent, according to figures released last week by business insights firm Vistra.

Companies House disputed those figures in an email to Biometric Update, with a spokesperson claiming that more than 250,000 out of 6 to 7 million people expected to complete identity verification, or up to 4.2 percent, have done so.

UK’s Companies House will be taking a hard-line stance against firms that have not completed ID verification by the deadline, warns Meg Ogunsola, Vistra’s global director of Entity Management Solutions.

“With ID verification through Companies House’s platform limited to biometric documents and UK driving licences, overseas directors and those reliant on paper documents should act fast and find alternative solutions,” says Ogunsola.

ECCTA was introduced in the UK in 2023 to bring changes to how company registrars operate in the country. The law will also make “failure to prevent fraud” a corporate criminal offence starting from September 1st, 2025.

Despite the threat of fines, 39 percent of UK directors said they were unaware of ECCTA deadlines, while only 28 percent said that they are ready for the new legislation, according to Vistra’s survey of 100 UK company directors. Larger companies show greater readiness for the new law, while none of the smallest firms stated they are ready to meet ECCTA deadlines.

This post was updated at 9:34am Eastern on July 24, 2025 to include statistics from Companies House and clarify the deadline for ID verification.

Article Topics

AML  |  digital company ID  |  digital ID  |  Digital Identity and Attributes Trust Framework (DIATF)  |  identity verification  |  KYB  |  UK  |  UK digital ID