Digital Entity ID Proposal Unveiled by CFIT to Combat Financial Fraud

UK Unveils Digital Company ID Blueprint to Combat Financial Crime

In a significant move to strengthen the UK's financial sector and combat economic crime, the Centre for Finance, Innovation and Technology (CFIT) has published a blueprint for fighting economic crime. The report, the result of the work of CFIT's industry-wide coalition, which brought together 70 experts in financial crime, recommends the widespread adoption of Digital Company ID.

Charlotte Crosswell OBE, the chair of CFIT, believes that Digital Company ID would help dismantle systemic barriers, close loopholes exploited by fraudsters, and reduce compliance costs for banks. The proposed ID is seen as a role technology plays in protecting the financial system and customers, supporting UK economic growth.

The Digital Company ID, if implemented, is expected to transform the business landscape in the UK. It is envisioned to streamline critical interactions such as procurement, tax filings, and confirmation statement submissions, not just for the government departments but for all relevant organizations. The Government is encouraged to consider mandating these organizations to share data on economic crime via Digital Company ID.

Phalé McMillan, the head of financial crime risk management and deputy group MLRO at NatWest Group, emphasizes the importance of cross-industry collaboration to protect consumers, businesses, and the overall economy. McMillan commends the work of CFIT, stating that it demonstrates the UK's position as an innovator within the global financial ecosystem.

The report also recommends the establishment of a taskforce to identify, prioritize, and develop high-value use cases for Digital Company ID within financial services. A body responsible for overseeing implementation and governance is suggested to be appointed. The development and testing of a functional prototype of the Digital Unternehmens-ID involved multiple organizations, including Lissi GmbH, which specializes in the development of the EUDI-Wallet Connector to enable interaction with the German EUDI-Wallet and future certified wallets across Europe.

In 2023, more than 1.2 million incidents of fraud were committed in the UK, equivalent to nearly two fraudulent acts every minute. For financial institutions, this could lead to an annual reduction in compliance costs of £1.7 billion. The proposed Digital Company ID has the potential to save the UK billions of pounds each year in lost revenue due to fraud.

Emma Reynolds MP, Economic Secretary at HM Treasury, commented on the UK's leading financial services sector driving growth and putting money in people's pockets through the Plan for Change. The Government is encouraged to consider the Coalition's findings in its mission to deliver economic growth and safeguard the UK's reputation as a safe place to do business.

Crosswell concludes that Digital Company ID would be a significant step towards a more secure financial system, benefiting both businesses and consumers. The proposed ID is expected to play a crucial role in the range of work aimed at growing the financial sector.