UK Finance is supporting Barclays, HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest Group, and Santander in developing a voluntary digital verification service that would allow customers to prove personal details through their banking apps.
The proposed service is being developed independently of the government’s wider digital identity programme and would remain optional for consumers. It is intended to let customers verify information such as name, age, or address when dealing with a third party, using data that has already been checked by their bank and shared only with explicit consent.
The banking industry says the model could reduce fraud, speed up customer onboarding, lower verification costs, and make digital transactions more convenient. UK Finance has invited expressions of interest from organisations that may want to participate in future pilot activity, including retailers, digital platforms, and businesses looking to streamline online customer verification.
Jana Mackintosh, Managing Director, Payments and Innovation at UK Finance, said: “The financial services sector is ideally placed to deliver a secure and trusted digital verification service. Using already verified information, shared only with the customer’s explicit consent, could help make digital transactions safer, quicker and more convenient as well as ensuring customers have full control over how their data is used.”
The initiative lands as fraud remains a major financial and operational threat. UK Finance’s Annual Fraud Report found that criminals stole £1.28bn through payment fraud in 2025, despite banks preventing £1.68bn in unauthorised payment fraud attempts. Fraud is also becoming more sophisticated as criminals use stolen data, synthetic identities, social engineering, and AI-enabled impersonation.
Dr Janet Bastiman, Chief Data Scientist at Napier AI, said: “The debate around digital identity often centres on privacy or convenience, but from a financial crime perspective, the more important question is whether it enables organisations to make better, more reliable risk decisions. A trusted digital identity ecosystem, built on secure-by-design principles and robust verification, has the potential to significantly strengthen fraud prevention by giving financial institutions greater confidence that customers are who they claim to be, making it far harder for criminals to exploit stolen or synthetic identities.”
She added: “However, security should always be based on ‘verify, don’t trust’. If a digital identity can be spoofed, imitated or compromised through weak security controls, it risks becoming an enabler of intercept and impersonation attacks rather than a defence against them. Digital identity should never be viewed as a silver bullet.”
The trust question is central. Digital identity can reduce repeated document uploads and create smoother onboarding, but it also concentrates sensitive verification processes in infrastructure that must be resilient, interoperable, and explainable. If customers believe a system is opaque, vulnerable, or difficult to challenge when something goes wrong, adoption will be slower.
The balance between stronger verification and personal anonymity has already become a live policy and technology question in the future evolution of digital identity. That tension is now entering mainstream financial services, where banks already hold verified customer data but must use it in a way that preserves consent and avoids overreach.
The proposed bank-led model also reflects the changing role of shared financial services infrastructure. Open banking showed that major institutions could collaborate on common rails while competing on customer propositions. A digital verification service could follow a similar pattern if consumers trust it and third-party businesses accept it. Identity, however, carries a higher emotional and regulatory burden than payment initiation or data sharing.
Security design, liability allocation, dispute handling, customer communication, and interoperability will shape the pilot’s outcome. The service will need to work across different banks, platforms, and sectors without becoming fragmented. It will also need to give customers confidence that consent is meaningful, data sharing is limited, and errors can be challenged.
The pilot will test not only the technology, but the willingness of consumers to let banks become a reusable identity layer for more of their online lives.
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