May I introduce you to the Department for Digital, Media, Culture and Sport’s open consultation/call for evidence on Digital Identity which can be viewed here.
As all mortgage and housing market stakeholders will know, ensuring that the clients you work with are exactly who they say they are is a key part of our process. But it’s fair to say that the current arrangements we have are something of a dog’s breakfast, particularly in terms of the multiple ways in which identity is requested and checked and the multiple organisations that have to request it.
What we potentially, and hopefully, have with this with new consultation is a step towards securing government-led digital identity checks, which as it suggests, will “support the development and secure use of digital identities fit for the UK’s growing digital economy”. And given the way our own market is heading, this can only be a good thing.
Purely from a combating fraud perspective – and advisory firms are just as susceptible to this criminal action as others – this could herald a big improvement in the process and thus reduce ‘successful’ fraudulent action. How often have we seen in the news cases of property fraud which involve hundreds of thousands of pounds being taken?
We therefore need a system where we can be confident that the person we are dealing with is the person with whom we believe we are dealing; that the person is entitled to the identity that they have presented; and that they, in the case of a property seller, are the true owner of the property being sold.
Without such confidence, we risk considerable damage to all stakeholders. Take your professional indemnity (PI) cover for one. Just recently, AON, pulled out of the PI market and while we’re not aware fully why this decision was taken, I suspect a lot of it was around an increase in fraud claims and the related increase in costs.
It’s therefore vitally important that we fill the current identity gap that exists which allows those significant frauds to be perpetrated. Otherwise, it’s quite likely that more PI insurers will follow suit, and there will continue to be large increases in premiums to reflect the drop in capacity.
So, what can the government do to support our endeavours in the market? Well, we’d like to see the wider use of biometric data to confirm identity and we’d like to see published standards on what is acceptable through regulators and government departments. Currently, conveyancing firm obligations, for example, are either outcome-based or unclear as to whether digital solutions can even be employed, which leads to us relying on paper copies of documents. Again, this heightens the risk that fraudulent document could be used and accepted.
The multiplicity of organisations that borrowers/homeowners/purchasers have to provide their identity to, within our process, also slows it down and frustrates in equal measure. As does the various ways that such identity must be presented and certified/verified. There is no standard process and having a government-led identity check would clearly cut down on the amount of time all this takes up. As would it cut down on costs associated with all this work. Once again, we should be able to save time and money by getting this right.
Overall, advisers would benefit as much as all other stakeholders, but we need a standard approach which constitutes an acceptable digital solution – one that everyone, whether they are the adviser/lender/conveyancer, etc, can adhere to. By achieving this we can greatly improve the process of securing our client’s identity and ensure that fraudulent activity predicated on the provision of false identification materials can be cut to very small, hopefully non-existent, levels.