UK's CFIT announces plan for digital identity system of businesses to combat commercial fraud
In a bid to revolutionise business in the UK, the Centre for Finance, Innovation and Technology (CFIT) has published a blueprint for implementing a Digital Company ID. This innovative solution is expected to improve efficiency, security, and trust, while saving billions of pounds every year in lost revenue and alleviating the burden of fraud on businesses.
The blueprint, which focuses on SMEs, includes seven specific recommendations. The first recommendation is to develop a digital company ID prototype with the support of the Financial Conduct Authority (FCA) Innovation services. The second recommendation is to enable 'reciprocal and secure' data sharing, with the government considering mandating all relevant organisations to share data on economic crime via digital company ID.
The third recommendation is to appoint a lead authority to oversee the implementation and governance of digital company ID. The fourth recommendation is for CFIT to work with industry to establish standards for interoperability, accountability, and secure adoption of digital company ID. The fifth recommendation is to create a multi-stakeholder taskforce to identify, prioritise, and develop high-value use cases for digital company ID within financial services.
The sixth recommendation is for policymakers to review the regulatory framework to ensure it is fit for purpose. The seventh recommendation is to 'drive market confidence through government adoption' of digital company ID.
The CFIT chair, Charlotte Crosswell OBE, stated that fraud stifles economic growth by burdening businesses and banks with unnecessary costs. She emphasised that the Digital Company ID has the potential to dismantle systemic barriers, close loopholes exploited by fraudsters, and reduce compliance costs for banks.
Notable supporters of CFIT's initiative include Mastercard and Lloyds Banking Group, who have financially backed CFIT's next industry-led coalition, set to launch in Q1 2025. GLEIF, the Global Legal Entity Identifier Foundation, has also announced the China Financial Certification Authority (CFCA) as the first Chinese 'qualified vLEI issuer' within the vLEI ecosystem.
The UK government's 'National Payments Vision' includes reference to CFIT's work in exploring the potential of digital verification solutions to combat economic crime. Companies House, an executive agency of the Department for Business & Trade (DBT), is seeking to capitalise on recently enhanced legal powers to improve the quality of its data and tackle misuse of its companies register.
Today's event will feature a proof-of-concept presentation by CFIT director of coalitions and research, Leon Ifayemi, among other sessions. CFIT, a private, non-profit organisation that has received £5.5m of public funding, is convening 'coalitions' of experts to tackle specific challenges facing the financial services industry.
The second coalition of CFIT will be focused on developing technology, policy, and regulatory solutions to help small businesses raise external finance more readily, successfully, and efficiently. The fifth recommendation is to create a multi-stakeholder taskforce to identify, prioritise, and develop high-value use cases for digital company ID within financial services.
In conclusion, the implementation of a Digital Company ID is a significant step towards combating financial crime and improving business efficiency in the UK. The seven recommendations outlined by CFIT provide a roadmap for achieving these goals, with the support of industry partners and the UK government.
The seventh recommendation, as outlined by the Centre for Finance, Innovation, and Technology (CFIT) in their blueprint for implementing a Digital Company ID, encourages policymakers to boost market confidence by adopting the digital ID themselves. Meanwhile, the fifth recommendation proposes the creation of a multi-stakeholder taskforce, with the goal of identifying, prioritizing, and developing high-value use cases for digital company ID within the financial services sector. This collaboration between industry, policymakers, and regulatory bodies is crucial in the fight against financial crime and the drive for business efficiency in the UK.
