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Defining identity for the future – Belton

by: Danny Belton, head of lender relationships at Legal and General Mortgage Club
  • 03/08/2022
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Defining identity for the future – Belton
Digital identification is coming, and that’s good news for brokers and lenders – if they embrace it now.

It’s a big change, but it’s coming. At Legal and General Mortgage Club, we recently hosted a webinar with Stuart Young from Etive, which is behind MyIdentity, the digital ID trust scheme for home buying and selling; and Eleanor Curry, working on digital ID at the Department for Digital, Culture, Media and Sport (DCMS).  

They made it clear that things are moving fast – largely because the benefits of digital identification are so compelling.   

Digital ID allows you to prove who you are and, in certain circumstances, your eligibility and rights without physical documents: often online but also in person. That will bring a range of benefits to consumers, businesses, and other organisations.  

For consumers – or buyers and sellers in the case of the housing market – it’s convenient, faster and more secure. For brokers and lenders, it could significantly cut costs and increase efficiency by removing the need to deal with physical documents. Ultimately, it will move the industry towards a fully end-to-end digital process for house buying, selling and lending – with all the benefits long envisaged from that.  

 

Private sector to take the lead 

The government is certainly committed, but as Curry told us, it wants the private sector to take the lead. As she put it: “We are not mandating digital entities, and we’re not mandating how the digital ID market develops, but we do want to help that market develop by building trust.”  

To build that trust, in 2020, it committed to three initiatives:   

  • Creating a framework of rules to show what a good digital identity scheme looks like – its “trust framework”;  
  • establishing a governance and oversight function to ensure the rules are followed – the governance framework; and  
  • legislating to remove “blockers” to using digital IDs – the legislative framework.  

It’s already made significant progress on the first two, with the second iteration of its UK digital identity and attributes trust framework launched last summer, for instance, and the interim Office for Digital Identities and Attributes (ODIA), established earlier this year. Since April, the Home Office and the Disclosure and Barring Service have also permitted the use of identity verification technology for pre-employment right to work and right to rent checks: providing real-world evidence of efficacy.  

  

Laying the groundwork  

Meanwhile, the private sector has taken up the challenge. Myidentity.org.uk is bringing together the UK identity providers to create a certification process for home buying and selling, bringing together brokers, lenders and the legal sector.   

It is working with UK Finance to get lenders on board and, with the Law Society as well, to make interim updates to the Lender’s Handbook to enable conveyancing firms and brokers to adopt the scheme. It’s also participating in the Financial Conduct Authority’s (FCA) regulatory sandbox, which allows firms to test innovative offerings in a live environment.   

Five identity providers are already participating in the Beta version of the scheme, with another 45 going through DCMS certification.  

Again, Young was at pains during the webinar to stress the moves are about facilitation and removing blockers to the adoption of digital ID. “Rather than forcing hands, it’s making it easier for people,” Young said.  

Ultimately, however, the convenience, security and cost-savings of digital ID mean it will see widespread adoption and in time will be ubiquitous. Brokers, lenders and others in the house buying (and renting) market don’t really have the choice to opt out. You can either be part of the change or have it happen to you.  

There are always risks in being a trailblazer or even an early adopter, but much of the groundwork has already been done. Those still waiting now may find they’re late to the party.   

The formal processes, requirements and standards are now being determined. DCMS and industry bodies are consulting and refining their approach. Before legislation, firms have a chance (and the protection of the FCA sandbox) to test digital ID processes – running them alongside their current processes, perhaps, to find an approach that works for their business – before one is imposed on them.   

Now is their opportunity to shape the future of the industry. But it’s a window of opportunity that could be closing fast.  

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