The Centre for Finance, Innovation and Technology (CFIT) has revealed details of the progress made towards creating a digital company ID that it hopes will counter economic crime and could contribute £600m to the UK economy from the widespread use of secure digital identities.

The initiative, led by a coalition of financial institutions and technology firms, is focused on creating a virtual passport for UK businesses. The digital ID is being designed to streamline processes like accessing finance and conducting everyday transactions, while also reducing the risk of fraud, with the coalition’s ultimate goal now being to produce a working prototype of the digital ID.

According to CFIT, research undertaken by the coalition since the project’s launch has proven that widespread adoption of a digital company ID would help prevent fraud, as well as boost efficiencies for banks and other financial institutions by saving them time, reduce financial services compliance costs, and enable the creation of a secure smart-data economy.

In its update, CFIT noted that the new Chancellor, Rachel Reeves, supports the project, with mention of the project in the National Payments Vision in which the government welcomed it as an opportunity to “explore the potential of digital verification solutions to combat economic crime”, alongside a pledge to “consider any findings that emerge from CFIT’s work in due course.”

Over seventy organisations are participating, including proof of concept partners such as Lloyds Bank, NatWest Group and Monzo, alongside the likes of Mastercard, Barclays, Santander, HSBC, Virgin Money, Experian, Revolut, Visa and Yoti.

Lloyds Bank CEO for business and commercial banking, Elyn Corfield, said: “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.

“Providing easier and quicker access to bank accounts and finance will enable businesses to secure greater investment for growth and deliver more jobs for people across the UK.”

CFIT said that the project has also received the backing of UK regulators such as the Financial Conduct Authority and Payment Systems Regulator, with the coalition set to announce the outputs, recommendations and next steps from the work programme in March 2025.

“Economic crime remains a major threat to the UK’s economic security, and has a profoundly distressing impact on consumers and businesses,” said Charlotte Crosswell OBE, CFIT chair.

“At CFIT, we are committed to addressing this and making the financial services industry more robust against fraud. The dynamic elements of Smart Data and Digital ID, along with cross sector interoperability, have been key to the success of the coalition to date and demonstrate a further milestone in CFIT’s mission to boost economic growth through financial innovation.”

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The project is among a number of new measures being highlighted by the UK Government, with the ultimate aim being to foster innovation in the financial sector, both for financial firms themselves as well as the public.

As well as exploring the possibility of digital IDs, the government is launching a pilot to deliver a Digital Gilt Instrument using distributed ledger technology, studying the potential of Open Banking to create seamless payment systems for consumers, and focusing on the use of other smart data schemes to unleash the power of consumer data to drive innovation.