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The Centre for Finance, Innovation and Technology (CFIT) has brought together a consortium of companies to find new ways of combating financial crimes in the United Kingdom using digital identity verification.
This coalition includes biometrics and digital ID security providers Experian, LexisNexis Risk Solutions, OneID and Yoti, along with GLEIF (the Global Legal Entity Identifier Foundation).
Additionally, Amazon Web Services, A&O Shearman, Barclays, CRIF, Dun & Bradstreet, Ernst & Young, HSBC, Lloyds Bank, Mastercard, Revolut, Santander, and Visa are involved. Regulatory bodies the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) round out the coalition.
This initiative focuses on the role of digital verification as an important tool in the prevention of fraud and other financial crimes, which are estimated to cost the UK billions of pounds annually.
“Economic growth and free trade is hampered by insufficient consumer or business digital identity processes,” says Yoti CEO Robin Tombs. “The work that CFIT is leading will help to address this key issue and Yoti will support this in all respects. We look forward to the new Government taking forward this vital reform agenda as part of its drive for greater economic growth.”
Banks Lloyds, NatWest, and Monzo are developing a proof of concept to test the impact of a corporate digital identity system. The recommendations for implementation by UK financial institutions as a digital identity verification solution are expected by March 2025.
“Enabling modern digital verification services for individuals and organizations is key to helping to reduce fraud, by reducing opportunities for imposters to misrepresent who they are,” says Paula Sussex, chief executive officer of OneID.
Data breaches impact all aspects of life
In an interview with Pymnts, Bryan Lewis, the chief executive officer of Intellicheck, underscored the increasing threat of data breaches to all aspects of life. These breaches have the potential to compromise sensitive information, including social security numbers, driver’s license details, employment history, and even alias names.
Lewis pointed out that traditional identity verification methods, such as knowledge-based authentication (KBA) and physical ID checks using black lights, are proving to be increasingly ineffective in the face of advanced threats.
“My particular bank, they still rely on a black light to check if the ID is real or not. Which, maybe it makes me think I should change my bank because that just does not work,” Lewis says in the interview.
While technology has enabled cybercriminals to become more sophisticated in their digital identity fraud tactics, it has also equipped companies to quickly adapt to these threats. Addressing these challenges necessitates a shift towards newer identity verification techniques that leverage various data sources and incorporate comprehensive risk assessment.
The company has deployed its identity verification tool for title agents to verify the identities of borrowers and sellers in real estate transactions, in an example of a financial-adjacent sector where a fraud incident can dramatically affect the victim.
Article Topics
biometrics | Centre for Finance Innovation and Technology (CFIT) | data protection | digital identity | financial crime | financial services | fraud prevention | identity verification | Intellicheck