How digital identity is enabling the future of financial services
*Please note that these thought leadership pieces represent the views of the contributing companies and do not necessarily reflect techUK’s own position.
In 2025, digital identity has become foundational to how financial institutions interact with customers, scale Know Your Customer (KYC) operations and compete with rapidly growing digital banks. As customer expectations shift and new regulatory frameworks come into force, such as the Data (Use and Access) Act 2025 (DUAA) in the UK and the Electronic Identification, Authentication and Trust Services (eIDAS) 2.0 in the EU, financial institutions are embracing digital identity as a necessity and a strategic opportunity. From onboarding to fraud prevention, digital identity is enabling a future where trust is scalable, security is seamless, and inclusion is achievable.
Unlocking the Digital Identity Opportunity
According to Mordor Intelligence, the global digital identity market is projected to grow from USD 64.44 billion in 2025 to USD 145.80 billion by 2030, with a compound annual growth rate (CAGR) of 17.74 %.
These figures reflect technological adoption and signal a transformation in how trust is built and maintained online. As fraud risks increase and manual compliance processes buckle under pressure, digital identity systems emerge as the scalable solution for KYC automation, instant identity verification (IDV), and frictionless onboarding experiences for customers.
The UK Government’s Digital Identity and Attributes Trust Framework (DIATF) is the key to unlocking these benefits for businesses and citizens in the UK, defining what a ‘good’ identity looks like and the certified providers that can achieve it.
Transforming eKYC and Customer Onboarding
Traditional customer onboarding across banking, financial services and insurance can be slow, repetitive, and tiresome, leading to customer drop-offs and loss of revenue for the business. However, digital IDV powered by technology such as biometric verification with liveness detection, NFC (Near-Field Communication) document authentication, multi-country eID connectivity, and customisable workflows and automation rules has changed that dynamic entirely.
In 2024, Business Research Insights reported that, 69% of financial institutions globally adopted electronic KYC (eKYC) solutions to reduce onboarding time and identity fraud. The global eKYC market itself is forecast to grow from USD 805.8 million in 2024 to USD 3.56 billion by 2033, according to IMARC Group.
Financial institutions using end-to-end identity verification platforms routinely report 2-4x higher onboarding completion rates, with significant reductions in false positives and abandonment rates.
Reducing Fraud with Biometrics and Electronic Identity Verification (eIDV)
The rise of synthetic identities, deepfakes, and digital fraud rings has made traditional checks obsolete. Financial institutions now face a delicate balancing act of maintaining a seamless user experience while staying compliant and identifying ever-more sophisticated fraud patterns.
Market-leading digital identity platforms are now tackling this with enhanced biometric liveness detection, deep document forensics, verification against authoritative databases and real-time behavioral risk analysis to offer a multi-layered fraud prevention stack.
Additionally, the emergence of public and private eID schemes around the world enable businesses to securely verify customers across borders in a few seconds in a privacy-preserving way. Connectivity into multiple eIDs not only enables compliance and business security but also opens financial institutions to new customers they might not have otherwise been able to access.
Expanding Global Access to Digital Identities
Digital identity is also driving financial inclusion. According to World Bank, an estimated 850 million people worldwide still lack a verifiable identity. This excludes individuals from accessing banking, credit, or insurance services.
In India, national identity schemes such as Aadhaar have enrolled over 99% of the adult population, enabling citizens to easily access to more digital services faster. Meanwhile, mobile-first identity solutions in Africa and Southeast Asia are unlocking access to microfinance, mobile wallets, and health insurance.
Platforms that support identity verification across geographies are essential to ensuring that global financial providers can extend their reach while remaining compliant.
How Compliance Can Become a Strategic Advantage
Digital identity emerged as a technological innovation adopted through a coordinated approach. As it becomes a regulatory requirement, the strategic advantage will be achieved by businesses through speed and effectiveness of implementation. Institutions that treat digital identity as part of their core infrastructure are already outperforming peers in acquisition cost, fraud mitigation, and customer satisfaction.
Organisations such as ComplyCube offer digital identity verification methods to achieve faster onboarding, better pass rates and enhanced user experiences. Examples of organisations achieving these outcomes can be found across banks, FinTechs, insurers, and payment providers, who are all adopting digital identity to streamline operations and elevate trust.
Conclusion
The financial services sector is undergoing a structural transformation, with digital identity at the core. Digital identity is becoming the default architecture for secure financial institutions with strong adoption rates, measurable ROI, and clear regulatory alignment.
Firms that invest in end-to-end identity infrastructure, covering verification, monitoring, and risk orchestration, will gain an enduring edge in speed, trust, and global reach.
For more information on how to meet global compliance requirements and adopt digital identity, get in touch with one of ComplyCube’s compliance experts.
Author
Joshua Vowles-Dent
GTM Lead, ComplyCube
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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.
