Scaling digital verification solutions

A strategic imperative for the City of London and UK economic growth

In an era where digital interactions and transactions have become the norm, the necessity for robust digital verification (DV) solutions has never been more critical. 

In recognition of the central role that financial services must play, the City of London Corporation has been at the forefront of championing DV solutions as a cornerstone for economic growth and consumer protection.

The economic rationale for enhanced digital verification 

Fraud made up 39% of crime in England and Wales in 2023. According to the National Crime Agency,  it costs the UK economy £190bn annually. 

Fraud is by no means a UK-only problem, but, importantly, there is clear evidence that DV can reduce fraud. By minimising losses due to fraud, businesses can redirect resources towards innovation and growth.  

Furthermore, efficient DV processes streamline user experience, thereby boosting customer retention and satisfaction.

In our flagship Vision for Economic Growth report, published in October 2023, the City Corporation projected that scaling digital verification solutions could give the UK economy a £4.8bn boost by 2030. This can be achieved through both fraud loss mitigation and digital service and infrastructure investments.

By minimising losses due to fraud, businesses can redirect resources towards innovation and growth.

Shaping industry action

The City Corporation, as a response to the Kalifa Review of UK FinTech, co-founded (with HM Treasury) the Centre for Finance Innovation and Technology (CFIT) in 2023.  CFIT’s distinct Coalition model brings together key industry players - including innovative tech firms and incumbent financial services firms - to develop solutions to shared challenges. 
 
CFIT’s second coalition concerns the verification of corporates to combat economic crime. The coalition includes major financial institutions like Lloyds, Natwest, and Monzo. Over the last year, these firms have worked with CFIT on a prototype and model for a digital company ID. This could revolutionise the way corporate entities verify transactions and customer identities, and the progress made by this coalition is an exemplar of sector-wide collaboration.

At the same time, CFIT will be publishing a roadmap for corporate identity in the UK . This builds on defined and mapped datasets to create a framework for a reusable Digital Company ID for the bank onboarding and ‘Know Your Business’ compliance process use case, which also focused on secure data sharing between financial services firms. 

Future Direction and Implications 

Looking ahead, the City Corporation is set to release a complementary  report on 25 March 2025. As the Government advances the Data (Use and Access) Bill, this report will focus specifically on verification of individual consumers of financial products and services.

It will address the impact of DV technologies on consumer experience and protection from fraud. Our lead on this report signifies our commitment to not only fostering innovation but also ensuring that these advancements translate into tangible benefits for consumers.

The Government’s National Payments Vision explicitly supports the Department for Science Innovation and Technology’s work to “enable the use of safe and trustworthy digital identity products.” Financial services are a priority sector for adoption. So the report will provide industry recommendations to Government and regulators, offering insights into the benefits of these innovations. 

All actors will need to decide on their role in this new digital identity framework ecosystem. Digital verification and identity  give more control over ‘Know Your Customer’ practices and enables a safer financial system. 

By creating research, facilitating collaboration, and supporting innovation through CFIT, the City Corporation is driving best practice in UK digital verification. As we look forward, the continued focus on scalable, efficient, and consumer-friendly verification systems will remain a priority for ensuring economic stability and growth in the digital age.

Chris Hayward, 
Policy Chairman of the City of London Corporation