Roundtable Summary: Digital Identity and Financial Services: Driving adoption by aligning policy, practice, regulation and fraud prevention
On Monday 2 March, techUK hosted a roundtable bringing together regulators, policymakers, and industry leaders from digital identity and financial services. The discussion focused on identifying barriers to adoption, aligning priorities, and defining practical steps to build a secure, efficient, and trusted financial ecosystem.
Roundtable overview
Barriers to adoption: awareness, silos and regulatory ambiguity
Several obstacles to adoption were identified. Regulatory ambiguity remains a challenge, particularly where firms are hesitant to rely solely on digital certificates under existing AML requirements. Internal silos within financial institutions were noted as slowing the uptake of new identity technologies. Consumer awareness can also be limited; many believe they already use digital verification services when their engagement often consists of basic document checks.
Participants emphasised that the challenges are rarely technological. Instead, adoption depends on trust, liability, clarity, and operational alignment. There was broad agreement that providing firms with guidance and regulatory comfort, rather than simply mandating compliance, is essential to encourage adoption.
Opportunities and strategic vision: beyond compliance
Digital identity presents clear opportunities beyond regulatory compliance. Participants discussed its potential as a tool against fraud, particularly in combating scams and deepfakes, and as a facilitator for onboarding within the gig economy and small businesses. There was a consensus that interoperability with international standards, including the EU digital wallet framework and G7 approaches, will be critical for cross-border financial services. Address verification was identified as a low-hanging opportunity for rapid digital transformation, given the current reliance on paper-based documentation and the frequency with which these checks must be performed.
Discussions also highlighted the need for positive use cases to demonstrate the value of digital identity to both consumers and businesses. This included making the case for adoption of digital ID, framing it more as a cost-saving opportunity for businesses, rather than something burdensome. In the financial services use case, once digital ID solutions are enabled, integration across sectors- such as telecommunications and retail- can become much easier. However, siloed systems within these industries currently hinder broader adoption.
Participants suggested that seamless user experiences, such as moving away from passwords to “invisible” verification, could increase adoption and trust.
Key discussion themes
Clear Guidance: Adoption is feasible when firms are provided with practical guidance and operational clarity. Participants emphasised that alignment across sectors is essential to avoid fragmentation.
Positive Use Cases: Real-world examples demonstrating tangible benefits for both consumers and firms are vital to overcoming skepticism, particularly concerns with centralised databases.
Coordination: Integration with other initiatives, including emerging Smart Data schemes and the Home Office fraud strategy, ensures digital identity is embedded strategically rather than siloed. This includes the wider AI agenda in the UK, or embedded finance.
Collaboration: Breaking down institutional silos through cross-sector collaboration was highlighted as crucial for building a coherent and trusted identity framework.
Conclusion
The roundtable reinforced that driving adoption of digital identity requires a coordinated approach across policy, regulation, and practice, coupled with trust-building measures for both firms and consumers. With alignment and collaboration, digital identity has the potential to reduce fraud, improve user experience, enhance financial inclusion, and unlock new economic opportunities across the UK’s financial ecosystem.
Thank you to those who took the time to join us, and stay tuned for future work on how we can drive adoption of digital ID.
To sign up for our digital ID working group, please click.
