The Investing and Saving Alliance (TISA) has been awarded a £340,000 smart grant from UK government innovation agency, Innovate UK, to accelerate the development of its Digital ID scheme.
TISA said the scheme will allow UK consumers to “easily access digital financial services by creating a single, reusable, secure ID.”
The grant will be used to develop and test consumer proofs of concept and the proposed technical approach. This, said TISA, will ensure the scheme is accessible to a broad range of consumer groups, including vulnerable customers.
TISA said Digital ID is a key enabler for accessing new digital financial services and transforming existing services such as product applications, switching and consolidation, for example pensions. To simply and securely provide identification when managing finances offers greater convenience, security and increased switching for consumers. This leads to better competition for consumers. Financial services will benefit from lower Know Your Customer (KYC) costs, ability to build transformative service and lower risk.
The Alliance also noted that digital ID will lead to a reduction of financial crime. The Open Identity Exchange has estimated that the use of digital IDs will prevent up to £8.5 billion in identity-related fraud per year and could save £1.5 billion per year by improving efficiency of the KYC process.
“Digital ID will benefit all parties in a transaction significantly,” said Harry Weber-Brown, director of digital innovation.
“Customers will experience a secure, quicker and simple journey when using financial services online leading to faster opening of accounts, less time managing passwords, more control of data, and ultimately better management of their finances. Providers will consequently benefit from improved customer satisfaction, higher conversion rates, and lower costs in account opening and product transfers.”
This, he said, could lead to the unlocking of economic value equivalent to three percent of GDP by 2030.
“The scheme will put the UK firmly at the forefront of digital identification market, a leader of anti-money laundering technology and will increase the speed of digital transformation in financial services. Initially, the scheme will be developed for UK market use and will be internationally operable. It will also be interoperable with government and other sectors through common standards.”
Government priorities
TISA has detailed regulatory and technical expertise and more than 200 members in the UK Financial Services industry, many of which would use the service.
The project will also help deliver several government priorities including supporting the BEIS Smart Data initiative, the government’s National Data Strategy and the FCA’s Open Finance strategy.
Digital Infrastructure Minister Matt Warman said digital technology “has the potential to add billions to our economy.”
In a statement he said: “I look forward to seeing the results of the proof of concept and how its lessons can be used by the sector in the future.”
TISA has convened a group of banks, insurance companies, identity providers, and other TISA members and formed a Governance Steering Committee that is responsible for setting the strategic direction of the project. The group is calling to hear from parties interested in being involved on the development of the scheme.
