Looking ahead to the budget: digital identity

On March 11, 2020, the Chancellor of the Exchequer will unveil the first budget of the new Government as well as making his debut, having been recently appointed. 

techUK welcomes the pro-tech outlook from Government. This budget will be the first signs of what this means in practice and we strongly hope that its plans for digital identity will feature. 

In the run-up to the March 2020 Budget, techUK will take a deep dive into the issues that will power the future UK economy. Here, we explore the challenges and opportunities for the new Chancellor around digital identity (ID). 


Digital ID & the Digital Economy

As payments and other financial transactions have shifted from in-person to online, fraud has followed. Spamming, phishing, identity theft, malware, and cyber-attacks allow fraudsters to gain access to huge amounts of online payment card data. Cifas, the UK’s fraud prevention service, reported 174,523 cases of identity fraud in 2017, a 9% increase from the previous year—and 84% of those cases took place online. 

In the long-term, digital ID creates the opportunity for payment and identification to be made more secure, increasing efficiencies and enabling both service and product innovation across the public and private sectors. The savings to the public purse and across the economy are potentially huge. 

In order to thrive in a post-Brexit world, the UK must step up its drive to becoming a fully digital economy, utilising the capabilities of technology and data to their full potential. The government must make provisions in the budget for a collaboration between the public and private sectors to work towards implementing digital ID in the UK. 

For consumers and small businesses, the digital economy must be easy to access, secure, and connected to all facets of their online lives. Industry and government must be sure they can verify the online identity of whoever they are dealing with, as online fraud continues to grow.  

The clearest way to fulfil all these requirements is digital ID, and there is an urgent need to establish a fully functioning market for digital IDs in the UK.  

Many other jurisdictions around the world have made great strides in providing businesses and consumers with this indispensable tool, and the UK risks falling behind if no action is taken. 

techUK has made a number of recommendations around digital ID—the most notable calls for the government to: “nominate one point of contact within Government charged with leading a digital ID policy which facilitates the creation of a fully functioning digital ID ecosystem, operating across public and private sectors.” 

techUK believes the budget should make provisions to fund a strong Digital Identity Unit empowered with cross-government backing to get digital ID done.   

A strong entity, combined with leadership from the Government, can bring together numerous private sector initiatives under a common strategy. Collaboration with the government will be vital to building an ecosystem that satisfies the needs of both the public and private sectors, where digital IDs can be created from multiple attributes and where security and interoperability are fundamental attributes.  

A governance structure and a common set of standards are badly needed, and out-of-date laws need to be revised. Infrastructure investment should be enabled to allow private sector digital ID providers and partners to check Her Majesty’s Passport Office and Driver and Vehicle Licensing Agency databases, as well as sandbox facilities for cross-sector age and identity verification. Above all, swift action needs to be taken. 

Digital ID is foundational to achieving the full benefits of a digital economy and digitisation, including open banking and data, travel, secure proof of age, and the digital delivery of public services. The UK has been a leader in these areas, however without the creation of an effective universal ID system, there is a ceiling on what can be achieved. 

If the UK fails to devote resources to digital ID, we will fall behind our competitors, the development of our digital economy will face limits, and we will struggle to maintain our position as a leading hub for innovation in digital technologies.. 

To see the other deep dives techUK has taken in the run-up to the March 2020 Budget, follow the links below: 

Digital Skills 

Digital Infrastructure 

Green Tech

  • Max Chen

    Max Chen

    Policy Manager | Digital Adoption
    T 07943 640 911
  • Ruth Milligan

    Ruth Milligan

    Head of Programme | Digital ID and Open Data
    T 020 7331 2173

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