By Harry Weber-Brown, digital innovation director at TISA

For financial services, the future is bright, the future is digital. Long-standing trends to re-orient cumbersome and friction-heavy customer interactions and transfer these into the digital space have accelerated. Challenges remain, however – creating a digital eco-system that satisfies consumer demand for speed, efficiency and security is not a straightforward task, and will require industry collaboration across a range of projects.

These four requirements – speed, efficiency, security and ensuring collaboration across providers – are not simple to reconcile. A basic stumbling block is the need to confirm the identity of the person each time they wish to open a new account with a financial service provider.

Consumers opening financial services on their phones, computers or other devices do not want to undergo long identification processes each and every time, however providers are rightly aware of their anti-money laundering (AML) obligations and the need to protect client assets from fraudsters.

The sustainable solution to this is a single, secure and reusable Digital ID, which may well be the most significant development in digitalising financial services in recent years. Several tech businesses already offer commercial digital identification, verification and authentication products, but these are limited to a single use for a specific service website and consumers need to be re-identified by different companies as part of continuous account maintenance. For providers and consumers, it will have the added benefit of enabling the rapid tracing of any misplaced or misidentified accounts, pensions, savings or investments– as the single Digital ID will be linked to each and all.

But to truly revolutionise the FS space, we need a single, reusable digital ID that can be authenticated across any provider quickly, while maintaining data privacy. This digital ID framework also needs to be relatively straightforward to adopt by financial services providers, who will rapidly need to use it for the authentication of millions of consumers and be compatible with the UK Government’s development of a Digital Identity Framework.

TISA did not shirk this challenge. We are coordinating industry efforts and working with government to deliver a secure ecosystem to support a reusable for digital ID for UK consumers. In 2018, we launched a Digital ID pilot to create an identity framework that meets the requirements of both consumers and service providers. The aim: by the end of the pilot, we wanted to establish a clear set of standards and create an outline Trust Framework that conforms to all regulatory, consumer and industry requirements.

This was followed by a Government funded (through an Innovate UK Smart Grant) proof-of-concept phase completed this year that involved industry and consumer testing. In this stage, TISA’s Digital Identity Programme tested real-life user journeys, including using a digital identity to open a new account. The results were striking. % , . Consumers felt comfortable in using digital identity and raised the reduced risk of fraud as a key benefit.

The response from the industry was similarly enthusiastic. The proof-of-concept involved connecting four identity providers (including Post Office, Yoti, Digitdentity and Ardent) to three financial services providers (including Fidelity, Profile Pensions and Moneyhub) through a Hub. We also surveyed participants in our virtual events and found that industry professionals saw a wide variety of benefits of a reusable digital ID, this included more efficient ID verification – including quicker and more cost effective onboarding, less manual processing, more robust verification processes, reduced ID fraud risk through strong ID, proofing and “Robust Fraud Controls”, and more effective KYC processes – leading to a better consumer experience.

As we move into the Live Pilot phase in 2022, we are looking forward to a wider roll-out of our world-class digital ID scheme. A single, re-usable Digital ID is a pre-requisite for a digitalised, consumer-friendly financial services market. Without it, the transfer of financial services into the digital space will be stymied for many years to come.

And we are optimistic. Our results prove this is very much a viable proposition. The promise of this service is great: the successful adoption of Digital Identities by UK consumers of financial services will enhance engagement between consumers and their finances, grow the market for innovative fintechs and expand access to financial services across the UK. Our industry has fantastic prospects to build a prosperous future for the many – but we need the foundation of Digital ID to get there. Our progress towards that will determine whether 2022 will be viewed as a success.