Barclays, HSBC, Lloyds, Nationwide, NatWest, and Santander have joined UK Finance to develop a voluntary digital ID service.
According to the announcement, the initiative has completed a proof-of-concept phase, with a live pilot in a real-world environment expected in the coming months.
In addition, the service is intended to be entirely voluntary, with customers retaining control over what data is shared and when. UK Finance has confirmed the project is independent of the government's own digital identification plans and will be restricted to private sector and retail use cases.
Fraud reduction as a key objective
UK Finance has framed the initiative as a direct response to rising fraud across the sector. According to the body, fraud losses in the UK rose by nearly a fifth over the past year, with total losses exceeding GBP 500 million in 2025. Authorised push payment fraud, in which victims are manipulated into voluntarily transferring funds to fraudsters, accounted for more than 30% of those losses. Moreover, only two-thirds of those affected recovered any funds, with total bank reimbursements reaching GBP 354.3 million.
Jana Mackintosh, managing director of payments and innovation at UK Finance, noted that the service would help make transactions safer, quicker, and more convenient. Mackintosh added that verified credentials could reduce the prevalence of scams, fake accounts, and synthetic identities, while enabling organisations to verify customers more reliably and lower associated costs.
The growing use of AI by criminals has been cited as a contributing factor, with UK Finance noting that new technology has lowered barriers to entry for fraudsters.
Banking infrastructure under scrutiny
The announcement arrives against a backdrop of ongoing concerns about the reliability of UK banking systems. A Treasury Committee report published in March 2026 found that nine UK banks and building societies experienced combined downtime of over 803 hours, the equivalent of 33 days, over a two-year period.
Barclays led the group with 33 outages, though its total downtime was 93 hours. HSBC reported 32 incidents with a cumulative outage of 176 hours, nearly double that figure. In addition, Lloyds faced its own difficulties earlier in 2026, when customers encountered unfamiliar transactions in their accounts; the bank subsequently suffered a further app outage just three weeks before this announcement.
