A clear majority – 81 per cent – of financial services professionals believe Digital ID would improve crime prevention in the industry according to research from financial consultancy Duff & Phelps.

The survey was conducted at a conference hosted by Duff & Phelps where The Investing and Saving Alliance (TISA) unveiled their new Digital ID scheme, which it claimed will reduce the costs of identity verification checks by up to 50 per cent.

TISA’s scheme will provision pre-verified identities, enabling customers to set-up, manage, and reuse a digital identity that is verified for Anti-money Laundering (AML) purposes.

Over a third – 34 per cent - of respondents cited more effective Know Your Customer (KYC) processes as the greatest potential benefit of introducing Digital ID, while 20 per cent cited lower operational costs, another 20 per cent cited efficient ID verification, and 14 per cent cited robust verification processes.

Duff & Phelps highlighted a benchmarking survey conducted by the Association of Certified Fraud Examiners, which said 73 per cent of respondents had seen an increase in identity fraud in 2020, while 80 per cent expected a further increase in the next 12 months.

Over half of the survey’s respondents - 57 per cent - are spending more than £150 when onboarding a new customer.

In addition, the survey found that over a third – 35 per cent - of respondents said they take an average of 3 to 5 days to progress an account from application to opening, while 29 per cent said that this process takes over five working days to be completed.

Duff & Phelps claimed TISA’s Digital ID service, which is expected to be rolled out in February 2022, will enable customers to deliver their verified identity within minutes.

The news comes after the Investing and Saving Alliance (TISA) was awarded a £340,000 grant from Innovate UK to help accelerate the development of its Digital ID scheme in November 2020.

“The need for a comprehensive digital ID service is only growing more urgent, as fraudsters increasingly target identity to deceive businesses,” said Mark Turner, managing director, compliance and regulatory consulting at Duff & Phelps. “Companies are aware of the threat and our survey respondents cited the effectiveness of KYC processes as the primary reason for adopting digital ID.”
“Digitising this check helps businesses protect themselves, by building a clear picture of their customers and the level of risk they pose.”

“As well as tackling financial crime, digitising ID verification will also save companies significant resources in terms of efficiency, resilience and costs. Digital ID is growing in acceptance and will underpin many initiatives as more firms implement digital verification schemes.”

He added: “Both businesses and customers will feel the benefits in almost all financial transactions, from buying their first home to accessing their pension.”

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