The City of London Corporation has launched a digital verification initiative, urging technology companies to develop identity verification infrastructure to support the financial sector's response to fraud. The organisation has proposed a voluntary system that would securely connect identity providers with financial services businesses requiring identity checks.
Under the proposed model, users would verify their identity once with an approved provider, with that verification reusable across multiple financial organisations through secure data transmission. The initiative does not mandate participation but seeks to encourage technology firms to step forward and build the underlying infrastructure.
Fraud costs and projected economic benefits
The City of London Corporation has framed the initiative as a direct response to the financial impact of fraud on UK banks. Policy chairman Chris Hayward stated that fraud cost banks more than GBP 1 billion in 2025. Hayward said that to help mitigate this, a digital-first economy that instils trust in the system and delivers clear benefits to consumers through faster, safer, and more optimal access to financial services is needed.
The organisation has projected that successful implementation of the proposed system could unlock GBP 5 billion in economic benefits over five years, though it has not detailed the methodology underpinning that estimate.
Industry and regulatory context
The initiative sits within a broader policy environment in which digital identity has become a focal point for both regulators and financial institutions across the UK. The financial sector has faced sustained pressure to reduce fraud losses, particularly in areas such as authorised push payment fraud, account takeover, and identity theft, all of which rely on weaknesses in identity verification processes.
A reusable digital identity model, if widely adopted, could reduce friction in customer onboarding while strengthening verification standards across the sector. However, voluntary frameworks of this nature typically face challenges around interoperability, liability allocation, and the commercial incentives required to drive consistent adoption among competing providers.
Hayward added that the initiative reflected a broader conviction that technology, while introducing new risks, also provides the means to address them. The City of London Corporation has not disclosed a timeline for implementation or named any technology firms currently engaged with the initiative.
