UK Expected to Grant Official Approval for Digital Identity Use in AML Checks

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The UK is expected to authorize the use of trusted digital identities in AML checks for financial institutions, according to a Biometric Update report.

HM Treasury and the Department for Science, Innovation, and Technology’s Office for Digital Identity & Attributes (OfDIA) are preparing new Money Laundering Regulation (MLR) guidance that recognizes trusted digital identities in financial services. 

Digital identities are deemed “trusted” if they are issued by providers certified under the digital identity and attributes trust framework. Certification will be overseen by the UK Accreditation Service (UKAS).

The UK government has highlighted the “vital role” of trusted and secure digital identity services in productivity and growth in the financial services sector, and in helping to combat identity fraud.

Figures from OfDIA’s Digital Identity Sectoral Analysis reveal that 27% of respondents to an official public consultation have already used digital identities to open a bank account, with 75% finding it faster than traditional physical documentation.

The UK government stated: “The Financial Services Growth and Competitiveness Strategy highlights the role of digital identities in reducing the costs of fraud and compliance, and indicates that the financial services sector could be one of the biggest beneficiaries of the £4.3 billion in economic efficiencies unlocked by the Data (Use and Access) Act.”