The Centre for Finance, Innovation and Technology (CFIT) today publishesits blueprint  for fighting economic crime through the introduction of Digital Company ID, which has the potential to  revolutionise business in the UK by improving efficiency, security and trust, while saving billions of pounds every  year in lost revenue and alleviating the burden of fraud on businesses. 

It has demonstrated that the solution to countering economic crime lies in the widespread adoption of Digital  Company ID, that will drive economic growth, by generating significant improvements in productivity and  countering the efforts of fraudsters. These findings are substantiated by quantitative analysis of bank onboarding  and KYB processes, alongside extensive industry consultation and research. The data projects that Digital  Company ID will significantly reduce regulatory and administrative burdens for businesses, particularly SMEs. For  financial institutions, this could also lead to an annual reduction in compliance costs of £1.7 billion. 

Digital Company ID will also help mitigate against the annual £6.8bn cost of fraud to the UK economy – both  directly, through unified and secure data sharing that will disrupt fraud networks and close exploitable gaps, and  indirectly, by enabling financial institutions to redeploy compliance savings into strengthening anti-fraud efforts. 

In 2023, over 1.2 million incidents of fraud were committed in the UK — equivalent to nearly two fraudulent acts  every minute, according to ONS data – and financial fraud is growing every year, with Artificial Intelligence (AI)  and tools such as deepfakes threatening to make fraud even more sophisticated and scalable. 

The report results from the work of CFIT’s industry-wide coalition that brought together a 70-strong unique group  of leading experts in financial crime from global financial services companies, academic institutions, technology  innovation hubs, government agencies, regulators and policymakers. 

To unlock the full potential of Digital Company ID, the Coalition is urging Government, regulators and the wider  financial sector to collaborate and put in place the necessary regulatory frameworks and initiatives. The report contains seven recommendations that will bring this work to fruition: 

1. Develop a Prototype for Digital Company ID: CFIT, in collaboration with industry, should launch and  test a fully functional Digital Company ID prototype, preferably with the support of FCA Innovation  services. 

2. Enable Reciprocal and Secure Data Sharing: The Government should consider mandating all relevant  organisations across the ecosystem to share data on economic crime, via Digital Company ID. 

3. Appoint a Lead Authority: To address market coordination failures, the Government should consider  appointing a responsible body to oversee implementation and governance. 

4. Promote Standards for Interoperability: CFIT should work with industry to establish standards that  ensure interoperability, accountability and secure adoption of Digital Company ID. 

5. Create a Multi-Stakeholder Taskforce: Establish a taskforce to identify, prioritise and develop high-value  use cases for Digital Company ID within financial services. 

6. Review the Regulatory Framework: Policymakers, working closely with industry, must review the  regulatory framework for Digital Company ID ensuring it is fit for purpose. 

7. Drive Market Confidence Through Government Adoption: Government departments should lead by  example, adopting Digital Company ID for critical interactions such as procurement, tax filings and  confirmation statement submissions. 

Economic Secretary at HM Treasury, Emma Reynolds MP, said: “The UK’s leading financial services sector is key  to driving growth and putting money in people’s pockets through the Plan for Change. CFIT’s work in countering  fraud demonstrates the UK’s position as an innovator within the global financial ecosystem. I look forward to  considering the Coalition’s findings as part of our range of work to grow the sector.” 

CFIT Chair, Charlotte Crosswell OBE, said: "CFIT has brought together some of the brightest industry minds to work together and find solutions to reduce the fast-rising, multi-billion-pound annual cost of fraud to the  economy. Fraud stifles economic growth by burdening businesses and banks with unnecessary costs, slowing  access to setting up bank accounts and the loan finance needed for businesses to invest and grow. 

“These challenges must be addressed if we're to support the Government in its mission to deliver economic  growth and safeguard the UK's reputation as a safe place to do business. Access to verified, authenticated and centralised data sharing through Digital Company ID would help dismantle these systemic barriers, close the  loopholes exploited by fraudsters, reduce compliance costs for banks and transform the business landscape in  the UK." 

Lloyds Bank CEO, Business & Commercial Banking, Elyn Corfield, said: “The coalition has proven that digitising  how banks undertake know your customer obligations will help make compliance checks more user-friendly for  Britain’s small businesses and support the UK’s fight against financial crime. Delivering easier and quicker access  to bank accounts and finance will also enable businesses to secure greater investment for growth and deliver  more jobs for people across the UK." 

NatWest Group, Head of Financial Crime Risk Management & Deputy Group MLRO, Phalé McMillan, said:  “Financial crime is one of the most pressing crimes in the UK, which is why cross-industry collaboration is vital  to protect consumers, businesses and the overall economy. The proposed Digital Company ID highlights the role  technology plays in protecting the financial system and customers, whilst supporting UK economic growth.” 

Monzo Business, General Manager, Jordan Shwide, said: “Driving innovation and supporting initiatives that  make life easier for SMEs is in our DNA - so we’re incredibly excited to be at the forefront of delivering a Digital  Company ID solution. This will enable quicker access to financial services for legitimate businesses and ensure  that key business information lives in one place. This will also make it harder for fraudsters to set up fake  companies and ultimately help prevent people falling victim to fraud." 

Sage CEO, Steve Hare, said: "The adoption of Digital Company ID has the potential to drive growth and foster  greater economic prosperity. For UK SMEs, which make up 99% of the business landscape, this presents an  opportunity to drive productivity while reducing compliance costs and cutting through admin. Overall, an  important step towards a more digitised economy."