The government has announced it will launch a new digital ID scheme to combat illegal working and make it easier for people to use vital government services.
It said it will be available to all UK citizens and legal residents and save time by “ending the need for complicated identity checks, which often rely on copies of paper records”.
The digital ID will be held on people’s phones and will be “mandatory as a means of proving your right to work”, the government said.
It added that in designing the scheme, the government will ensure it works for those who aren’t able to use a smartphone, adding that “inclusion” is at the “heart of its design”, with a public consultation due to be launched later this year.
Maria Harris, chair of the Open Property Data Association (OPDA) – the UK’s trade body for companies “providing and sharing secure, trustable and smart property data” – said it appreciated concerns around national infrastructure and data security, but that the digital ID card proposal was “another positive step towards the realisation of trust frameworks”.
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She continued: “A securely verified and reusable digital identity has the potential to increase consumer confidence in digital solutions, to reduce fraud, and to make processes like home buying safer and more assured. For it to succeed, however, it must be built on open standards, be interoperable across all smart data schemes, and give consumers full control over how their data is used and shared.
“OPDA has long argued that digital IDs can play a pivotal role in improving risk and fraud checks and in transforming the property market, but only if they are implemented in a way that builds trust, transparency and security across the system.”
Beth Rudolf, director of delivery at The Conveyancing Association, said digital ID could have “multiple benefits to both consumers and property market stakeholders”.
“For example, it virtually eradicates seller impersonation fraud, and for those who choose companies who also provide the digital anti-money laundering (AML) checks for source of wealth and source of funds, it can reduce the time dealing with the enhanced due diligence from three weeks to three minutes, as has been recorded in the right to work DSIT (Department for Science, Information and Technology) digital ID use case.
“Of course, once we get digital ID, we get Qualified Electronic Signatures, then digital transfers and digital registration, which will remove approximately £19m of lost, unpaid work dealing with requisitions on title around identity, client names, and witness details,” she added.
Current proof of ID and address process can be ‘onerous’
Rob Gill, managing director at Altura Finance, said in the current home buying process, a prospective buyer could provide their ID and proof of address at least three or four times and to multiple parties. This includes solicitors, estate agents, mortgage brokers and lenders if needed.
He noted that the ways in which this could be provided also varied, with some apps available, pictures not accepted or having to provide an actual passport or utility bill in person in some cases, although the latter is rare.
Although some apps share the ID and proof of address to different parties, Gill said there is duplication, and the process can be “onerous”.
A digital ID would mean that the ID and proof of address would be combined, and it could be shared more quickly and easily, he said.
“I think if the institutions and the government lead on this and start insisting that it’s necessary to get a job, to get a mortgage, then people will start using it. I’m confident that when most people have this and start using and see how easy it is and the experience is not doing these three or four times or using different apps, but logging into one app and firing off the ID three or four times is good,” he said.
Gill added that digital ID exists in a lot of other European countries, and all over Asia as well, so the UK is an “outlier” in some respects.
“I think [the] simple message here is that it stops a huge amount of duplication when it comes to providing or collecting proof of ID and address,” he said.
Sebastian Murphy, group director at JLM Mortgage Services, agreed that the introduction of digital ID cards would “clearly make it easier for stakeholders like ourselves and lenders to check ID, to have a central source for those checks, and as a result to process our cases in a quicker time frame”.
He continued: “Anything that speeds this up is going to make a difference; as we’ve seen with the way we check settlement/resettlement status for clients, it’s become an easier task to fulfil because of the use of technology, and I see no reason why a digital ID card wouldn’t help us in a similar way.
“With, of course, the obvious caveats around ensuring this is a highly secure method and that it can’t be abused by fraudsters and criminals.”
Security concerns around digital ID cards still need addressing
Richard Howes, director of Paradigm Mortgage Services, said there was an advantage to a digital ID card in “simplicity in terms of checking”, and having it done once in any financial services transaction “could be a good outcome for consumers”.
He noted: “The objections to government ID cards from 20 years ago seem to have dissipated, given we all carry a lot more digital ID now and there seems [to be] more acceptance around this.”
The coalition government scrapped ID cards that were introduced on a voluntary basis in 2008, with 150,000 ID cards in circulation by 2010.
Howes noted that he had concerns around the security of having such a card on an app, especially with advances around artificial intelligence (AI) and fraud and the effect this could have on an individual.
“Aside from the concerns around an app being hacked, this would be the ultimate data win for a fraudster if they could get into a person’s ID by stealing their phone. According to the Crime Survey for England and Wales 2024, an estimated 78,000 people had phones or bags snatched from them on the street in the year ending March 2024.
“This is equivalent to 200 ‘snatch thefts’ a day and is a 153% increase on the number of incidents in the year ending March 2023. If ID cards become a ‘prize’, we might all expect this type of crime to increase, and therefore there needs to be some very serious mitigating measures in place to deal with thefts, given what criminals might be able to do with an individual’s ID card,” he noted.
The government said in its announcements that the new plans would have “significant benefits for reducing identity theft and preserving privacy, with security at its core”.
“Digital ID limits personal details being shared unnecessarily, by only sharing the relevant information for the specific scenario in question. It will also use state-of-the-art encryption and user authentication to ensure data is held and accessed securely,” the announcement added.
