The introduction of “virtual passports” for businesses could save the UK economy £600m lost in financial crime as global digital ID spend is projected to reach fresh highs of $26bn, according to new research.
The Centre for Finance, Innovation and Technology (CFIT), a government-backed private sector-led body examining opportunities for the British fintech sector, has called for an embracing of digital identification as a means of tackling fraud.
Fraud is one of the biggest strains on British finances, with estimated annual costs resulting from economic crime reaching just under £200bn.
CFIT, chaired by Charlotte Crosswell, has called for the implementation of corporate digital IDs, which it believes will prevent fraud, save time and resources for financial institutions and progress towards a “secure smart-data economy”.
“Economic crime remains a major threat to the UK’s economic security, and has a profoundly distressing impact on consumers and businesses,” said Crosswell.
“At CFIT, we are committed to addressing this and making the financial services industry more robust against fraud. The dynamic elements of Smart Data and Digital ID, along with cross-sector interoperability, have been key to the success of the coalition to date and demonstrate a further milestone in CFIT’s mission to boost economic growth through financial innovation.”
The body has been conducting research with proof of concept partners including banks such as Lloyds, Monzo, Barclays and Revolut, digital identity companies like OneID and Yoti as well as governmental regulatory groups such as the Financial Conduct Authority (FCA) and Companies House.
“We’re incredibly excited to be part of this coalition exploring the potential positive benefits of digital verification,” said the general manager of Monzo Business, Jordan Shwide.
“This not only enables quicker access to financial services for legitimate businesses, but it also means lots of business information lives in one place. This should make it harder for scammers to set up fake companies and ultimately help prevent people falling victim to fraud.”
Chancellor Rachel Reeves has previously pledged to “consider any findings that emerge from CFIT’s work in due course” as part of the Treasury’s National Payments Vision.
Globally, around $15.2bn was spent on digital identity verification last year, according to findings from Juniper Research.
This figure is projected to grow by 74%, exceeding $26bn by the end of 2024 according to the firm, which has suggested the use of new solutions to tackle fraud was rising rapidly.
According to UK Finance, fraudsters stole £1.17bn in 2023, down slightly from 2022’s £1.22bn.
Read more: ‘Their silence says it all’: Revolut demands Meta fraud liability
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