Digital ID and Financial Services: two sides of the same coin
Digital identity and financial services have always been deeply intertwined, with trust at the very heart of the relationship. How individuals and businesses manage money hinges on the confidence that their identities are secure and verified.
As technology transforms finance, digital ID is no longer just a support tool, it is a critical enabler. From preventing fraud, streamlining compliance and supporting the next wave of Web3 technology- the opportunity for the UK is immense.
Realising this potential will require forward-looking strategies and pro-innovation regulation designed to foster confidence and unlock growth. Now is not the time to be complacent, both policymakers and industry must build upon current foundations to drive the UK forward as a leader in secure, digital ID-enabled finance. The potential is there, and techUK has a plan on how to seize it.
Early foundations
Banks were among the first to adopt digital identity checks to onboard customers, comply with Know Your Customer (KYC) regulations, and prevent fraud. Estonia- a pioneer in digital identity – demonstrated how digital ID can build trust in banking. Digital banking logins were one of the country’s first eID’s in 1996, a public–private partnership with banks distributing ID card readers made financial services the gateway to nationwide adoption.
The financial services sector is an innovation powerhouse, often using innovative technologies before they proliferate into other areas of the economy. This culture of innovation adoption must always be pursued against a backdrop of safety and pragmatism. As technology and regulation continues to evolve at pace, the relationship between digital ID and financial services is moving from supportive to symbiotic - and the results to date are already striking.
How Digital ID in Finance is already making an impact
Fraud is now one of the UK’s most pressing financial risks: in the first half of 2024 alone, almost £600 million was stolen, with identity-related fraud the leading category. UK Finance projects that in 2025, half of all bank fraud will be tied to identity. Against this backdrop, digital ID is no longer a convenience, it is an essential foundation. Strong, interoperable IDs can protect consumers and SMEs alike, while easing compliance costs for banks.
Financial services are already deploying advanced tools- from biometrics to blockchain based verification- to secure identity. But looking ahead, Web3 opens an entirely new frontier. As crypto and digital assets move into the mainstream, identity will become the critical trust layer that enables adoption. The U.S. sees this clearly: regulators stress digital ID as the backbone for KYC and anti-money laundering in crypto, while industry leaders frame it as the bridge between decentralised finance and traditional systems.
Digital ID and financial services are deeply intertwined. The real question is not if this potential can be realised, but what’s holding it back.
The current foundation must be built upon.
Pro-innovation regulation is essential to keep financial services and digital identity close together, unlocking new use cases and accelerating adoption.
In 2023, HM Treasury pledged to update the Money Laundering Regulations (MLRs) as part of its Economic Crime Plan 2023–26. Building on the Financial Services Growth & Competitiveness Strategy released in July, new proposals aim to plug loopholes, tighten customer checks, and give firms greater clarity on their obligations. Significantly, the Treasury also signaled it would work with DSIT to produce joint guidance on using digital ID within the MLRs- a timely and positive step.
techUK’s June 2024 consultation response made the point clearly: digital identity is still the missing piece in the UK’s efforts to tackle financial crime. Although digital ID is already permitted for customer due diligence, uptake has remained patchy - held back by entrenched processes, legacy systems, and doubts over credibility. The direction of travel is right, but delivery will determine success.
Financial services are both a prominent testbed and one of the sectors that most relies on robust identity verification. At the same time, advances like Open Banking, instant payments, and crypto only increase the demand for trusted, interoperable IDs. The two domains are locked in a feedback loop -progress in one accelerates the other -and regulation must address them in parallel with a shared strategy and milestones. A long-term, cross-sector strategy for digital ID is sorely missing, a point we've emphasised in our latest Digital ID report.
The UK Treasury’s National Payments Vision or a Smart Data Strategy can provide a useful precedent: a roadmap combining short-term actions with a long-term vision. A national digital ID strategy could do the same, aligning government, regulators, and industry around sector-specific outcomes such as fraud reduction, productivity gains, and the safe adoption of digital assets.
Seizing the moment: Digital ID as the Backbone of Future Finance
The UK must not be complacent, but build on the success of digital ID within financial services. This interdependence will only continue to grow, and if the UK is to be ready for the future of finance, we must take steps today to drive greater adoption.
Clear rules can open up new use cases -from AML compliance, customer onboarding, or business verification -to private providers. Setting timelines for these use cases would build investor confidence and speed up adoption. With rapid innovation and fast-moving policy in the digital ID sector, the UK government must move decisively - encouraging private-sector adoption, protecting competition, and positioning the country as a global leader in secure, citizen-centric financial services.
Elis joined techUK in December 2023 as a Programme Manager for Tech and Innovation, focusing on Semiconductors and Digital ID.
He previously worked at an advocacy group for tech startups, with a regional focus on Wales. This involved policy research on innovation, skills and access to finance.
Elis has a Degree in History, and a Masters in Politics and International Relations from the University of Winchester, with a focus on the digitalisation and gamification of armed conflicts.
James leads our financial services programme of activity. He works closely with member firms from across the sector to ensure innovation and technology are fully harnessed and embraced by both industry and regulators.
Prior to joining us James worked at other business organisations including TheCityUK and the Confederation of British Industry (CBI) in roles focused on supporting the financial & related professional services eco-system, with a particular focus on financial technology and market infrastructure.
He holds degrees from King's College London and Oxford Brookes University, and outside of work enjoys socialising, exercising, and travelling to new locations.
Digital identities will provide a gateway for citizens and SMEs into the digital economy. techUK members demonstrate the benefits of digital identity to emerging markets, raise their profile as thought leaders, influence policy outcomes, and strengthen their relationships with potential clients and decision-makers. Visit the programme page here.
Digital ID campaign week 2025! 🔐
Discover insights from industry leaders exploring the crucial themes shaping digital identity throughout this Campaign Week.
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Sue leads techUK's Technology and Innovation work.
This includes work programmes on cloud, data protection, data analytics, AI, digital ethics, Digital Identity and Internet of Things as well as emerging and transformative technologies and innovation policy.
In 2025, Sue was honoured with an Order of the British Empire (OBE) for services to the Technology Industry in the New Year Honours List.
She has been recognised as one of the most influential people in UK tech by Computer Weekly's UKtech50 Longlist and in 2021 was inducted into the Computer Weekly Most Influential Women in UK Tech Hall of Fame.
A key influencer in driving forward the data agenda in the UK, Sue was co-chair of the UK government's National Data Strategy Forum until July 2024. As well as being recognised in the UK's Big Data 100 and the Global Top 100 Data Visionaries for 2020 Sue has also been shortlisted for the Milton Keynes Women Leaders Awards and was a judge for the Loebner Prize in AI. In addition to being a regular industry speaker on issues including AI ethics, data protection and cyber security, Sue was recently a judge for the UK Tech 50 and is a regular judge of the annual UK Cloud Awards.
Prior to joining techUK in January 2015 Sue was responsible for Symantec's Government Relations in the UK and Ireland. She has spoken at events including the UK-China Internet Forum in Beijing, UN IGF and European RSA on issues ranging from data usage and privacy, cloud computing and online child safety. Before joining Symantec, Sue was senior policy advisor at the Confederation of British Industry (CBI). Sue has an BA degree on History and American Studies from Leeds University and a Masters Degree on International Relations and Diplomacy from the University of Birmingham. Sue is a keen sportswoman and in 2016 achieved a lifelong ambition to swim the English Channel.
Associate Director - Technology and Innovation, techUK
Laura Foster
Associate Director - Technology and Innovation, techUK
Laura is techUK’s Associate Director for Technology and Innovation.
Laura advocates for better emerging technology policy in the UK, including quantum, future of compute technologies, semiconductors, digital ID and more. Working alongside techUK members and UK Government she champions long-term, cohesive, and sustainable investment that will ensure the UK can commercialise future science and technology research. Laura leads a high-performing team at techUK, as well as publishing several reports on these topics herself, and being a regular speaker at events.
Before joining techUK, Laura worked internationally as a conference researcher and producer exploring adoption of emerging technologies. This included being part of the team at London Tech Week.
Laura has a degree in History (BA Hons) from Durham University and is a Cambridge Policy Fellow. Outside of work she loves reading, writing and supporting rugby team St. Helens, where she is from.
Elis joined techUK in December 2023 as a Programme Manager for Tech and Innovation, focusing on Semiconductors and Digital ID.
He previously worked at an advocacy group for tech startups, with a regional focus on Wales. This involved policy research on innovation, skills and access to finance.
Elis has a Degree in History, and a Masters in Politics and International Relations from the University of Winchester, with a focus on the digitalisation and gamification of armed conflicts.
Elis joined techUK in December 2023 as a Programme Manager for Tech and Innovation, focusing on AI, Semiconductors and Digital ID.
He previously worked at an advocacy group for tech startups, with a regional focus on Wales. This involved policy research on innovation, skills and access to finance.
Elis has a Degree in History, and a Masters in Politics and International Relations from the University of Winchester, with a focus on the digitalisation and gamification of armed conflicts.
