Four thoughts on the City of London’s digital verification orchestrator initiative

Six months ago, the City of London published a report called Securing growth: the digital verification opportunity, which points out several trends that together make a generational opportunity for the financial services sector:

• public appetite for better, easier ways to access services in the wake of the rising cost of living
• the production roll-out of digital ID in the UK and around the world
• a newly compliant foundation for digital verification, especially the digital verification services trust framework and Data (Use and Access) Act

The report recommends an independent service, be adopted to mediate verification across the sector. They call this service the orchestrator.

It’s an interesting model patterned on Nordic BankID schemes, or ConnectID in Australia; a consortium of high-profile institutions all agreeing to adopt the same verification rules and technologies.

Done well, it can make verification far easier and safer for all involved.

They sought input from the industry, which Vouchsafe responded to. The four main points from our response are summarised here:

It must work for the entire sector, not just the big banks

Open Banking started with the UK’s nine biggest banks in 2016, and even today smaller institutions are playing catch-up.

But ten years on, there’s a real opportunity to do it in a better way, that works up and down the sector.

Smaller firms with less sophisticated controls are more exposed to AI-powered fraud, and stand to gain the most from an orchestrator.

As a result of the rising cost of living, the affordable loans offered by credit unions are seeing unprecedented interest, and the government has set an ambitious goal of doubling CU membership by 2030.

But these firms are often ignored by the wider market despite their massive potential to tackle financial inclusion. We think it’s time that chauvinism ended.

It must build on top of the existing trust framework

The digital verification services trust framework became law last year, and provides a safe legal foundation for licences firms of all sizes to accept certified digital identities.

The framework includes a complex but ultimately sensible system to calculate the confidence/assurance inherent in any given identity assurance process.

That means that for the first time, we have a common language to compare different firms’ risk appetites and policies.

Firms just need to agree on the confidence level each product needs, and the actual proofing process becomes an implementation detail.

The framework also outlines a strict set of data protection and information security rules, stricter than what an FCA-regulated firm itself must do in some respects.

The orchestrator’s services must have been certified to the framework.

It must be truly neutral, without its own wallet and credential

Successive UK governments outsourced digital identity to the private sector, but the most recent government has course-corrected.

They have confirmed that they will issue digital versions of key documents themselves that the wider economy will be able to validate and rely on, like the upcoming mobile driving licence.

But the UK already has a large number of private sector wallets and IDs, including Yoti and OneID as well as specialty options like Me Passport.

Our view is that these should not receive special treatment. You should not have to download a particular private company’s wallet app in order to interact in the economy.

In other words, vertical integration shouldn’t be allowed. An above-board orchestrator should not also have a side business issuing digital IDs and wallets, because the incentives will never align.

It must enable financial inclusion and access

Digital verification is a privilege. It relies on having a stable, established official data trail and standard photo ID. 11 million Brits don’t have either.

We can’t lock an entire sector behind a verification system that doesn’t work for great swathes of the population. It would be a moral crime as well as an economic one.

An orchestrator must be able to provide compliant, like a vouch from a trusted referee, inclusive fallbacks to get everyone verified.

Vouchsafe organises events and webinars on financial inclusion and the UK’s digital identity landscape and issues like financial inclusion. See previous and upcoming events

To learn more about how Vouchsafe helps firms replace legacy document checks with safe, easy digital ID acceptance, book a call with us.