ID poverty is a customer experience problem; ignore it at your peril
Jaye Hackett
This is an adaptation of a talk Jaye gave at the European Identity and Cloud Conference in Berlin on May 8, 2025. Slides and video are available at the bottom.
Some of the credit unions Vouchsafe are working with tell us that up to 60% of their applicants don’t have the right paperwork to pass KYC.
That’s an alarmingly high figure, and far from the lofty 99% success rates that current-gen identity verifiers and KYC platforms promise.
Credit unions are hyperlocal; often serving people who are overlooked by mainstream lenders, so they naturally see a more pronounced version of the problem of ID poverty, but it’s a significant issue in all parts of the sector.
As financial services digitise, and as the rise in AI fraud and regulatory changes like the UK’s Online Safety Act encourage more services to introduce explicit identity verification, ID poverty is becoming a severe barrier to customer experience.
What is ID poverty?
ID poverty is the inability to prove who you are, no matter the cause.
That might be because you don’t have the right documents. Or it might mean not having them in the form or timeframe a particular service demands. It’s not always about financial hardship, though that does play a role.
It is very common.
11 million people in the UK don’t have either a passport or a driving licence; a pretty good estimate of the size of the cohort who are most seriously affected.
ID poverty can be easy to miss if you’re not looking for it, but you can see it in:
- High retry rates on video selfies or document uploads
- Lower-than-expected conversion from pre-approval to successful onboarding
- A backlog of cases waiting for manual review
- Long support threads about “what counts” as acceptable ID
Some real examples
- A young person just out of education, living at home, with no bills in their name and no photo ID
- An older customer who was grandfathered into their account and has never needed to show ID before
- A domestic abuse survivor trying to rebuild their financial life without access to old documents
- A carer who handles paperwork for someone else, but now needs to open something in their own name
- Someone who changed their name and is mid-way through getting it updated across multiple systems
- A UK migrant used to providing their biometric residence permit, who now has an eVisa far fewer services accept
In all of these cases, the applicant might be completely eligible, but the flow breaks down because the system assumes a very specific kind of proof.
Our data shows that women, under-30s and over-60s are much more likely to struggle with ID challenges.
It isn’t all-or-nothing
There are different kinds of disability. You might be deaf. You might be on a loud flight and have forgotten your headphones. You might have just landed after that flight and be unable to hear properly. And of course, some new technology might come along and stop deafness from being a disability in the first place.
ID poverty works the same way. At one end are people who’ve never had formal ID.
At the other, people who just don’t have it to hand right now. Maybe they’ve sent it off for renewal. Maybe their name has changed and their paperwork hasn’t caught up. Maybe they’re travelling, in between addresses, or just missing one document the system expects.
Like disability, ID poverty isn’t always permanent. It can be temporary or situational.
What we’ve found that works
One of the things we’ve had success with at Vouchsafe is a method we call biometric vouching.
A trusted referee confirms the user’s identity, and we layer in biometrics and modern anti-fraud tech so it can be done automatically and at scale.
It works so well because the exact people who often struggle with ID poverty still tend to have stable, high-trust relationships; exactly the kind that can be used for vouching.
The method meets rules for regulated industries like banking, and we’ve assured it to the UK’s trust framework for digital identity.
The method bears similarities to what happens when you get your first passport.
KYC is a design problem that can be fixed
Current-gen KYC systems are designed for how people should live, not how they actually do.
Most services aren’t trying to exclude anyone. But if your product only works for people with a passport, a driving licence, and an extensive credit file, then a lot of your customers are going to end up stuck, or gone.
The better approach is to build in some flexibility and think in terms of risk, rather than a static list of documents.
Instead of just thinking in terms of documents, think in terms of risk. Build in some flexibility. Design for the edge cases, because in a world where 1 in 2 people are financially insecure, they’re not edge cases at all.
Jaye’s conference talk:
