Heads-up on digital IDs

In the next few years, UK consumers will move from relying on passwords for accessing their financial accounts to quicker, safer systems of digital IDs built around biometrics and libraries of background data. Neasa MacErlean outlines the path ahead as well as its opportunities and regulatory challenges for compliance officers.

Is the development of digital ID inevitable?

Yes, and it is well-developed in several other countries, making the United Kingdom something of a laggard. Being able to prove the identity of individuals online is as necessary for modern economies as the building of roads and electricity grids, according to the Institute for Innovation and Public Purpose at University College London. It is a necessary precursor to seizing "the opportunities of this century", say Sir Tony Blair and William Hague, in a 2023 joint report, offering a stepping stone to "radically change the way in which our public services are delivered". [1] Such a scheme is particularly useful during unstable times, as it helps the economy continue to function - as Ukraine has found through its Diia app, [2] which enables Ukrainians to carry out transactions anywhere in the country and which is proving "significantly beneficial during the current conflict", according to UK Finance. [3] But, while digital ID could become universally available in the UK, lawyer Philip James, a Global Privacy & Cybersecurity partner in Eversheds Sutherland, thinks "there still remains a reluctance" to make it mandatory. Whatever happens, the Financial Conduct Authority will play a significant role, as will, of course, the new UK Government.