# Digital identity: the future of securing finances
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-10-07
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: Combat Online Fraud with Digital Identity Technology
Meta Description: Learn how digital identity technology can help prevent online fraud and protect your financial transactions. Discover the benefits today!
URL: https://financedigest.com/digital-identity-the-future-of-securing-financeshtml

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_![](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/237-1736815076877-compressed.jpg)_

_By Philipp Pointner, Chief of Digital Identity at Jumio_

Recent research by UK Finance found that victims [lost £1.3bn in 2021](https://www.theguardian.com/money/2022/jun/29/uk-victims-lost-13bn-in-2021-amid-surge-in-online-new-data-shows#:~:text=It%20found%20there%20were%20195%2C996,more%20susceptible%20to%20such%20scams.) amid a surge in online fraud. Moreover, losses from unauthorised fraud, where the transaction is carried out by a cybercriminal who has gained access to the victim’s personal information, accounted for £730.4m. Unfortunately, this shows no sign of abating as varying types of [fraud are expected to rise](https://www.cityam.com/fraud-on-the-rise-as-cost-of-living-soars-fca-warns/) with scammers taking full advantage of the ongoing cost-of-living crisis.

One type of fraud that can be tackled easily, however, is identity-related fraud – the exact type that cost the UK more than £700m last year. The key to this is embracing digital identity technology – something the [UK government](https://www.gov.uk/government/news/new-legislation-set-to-make-digital-identities-more-trustworthy-and-secure) recently announced it would be harnessing to help tackle the “record high” levels of fraud in the UK. Put simply, [digital identity technology](https://www.financedigest.com/you-cant-get-faster-than-that-spring-statement-update-delivered-digitally-as-it-happens-with-app-driven-technology.html "‘You Can’t Get Faster Than That’ – Spring Statement Update Delivered Digitally As It Happens with App-driven technology") can help to ensure those accessing funds, making transactions or taking out loans are authorised to do so.

Consumers are wising up to the need for robust verification measures too. Our recent [survey](https://www.jumio.com/about/press-releases/global-digital-identity-research-2022/) found that 78% of UK consumers think it’s important to use a digital identity to prove who they say they are when using a financial service online. What’s more, over half (57%) say they would be more likely to [engage with an online financial services](https://www.financedigest.com/the-future-for-financial-services-is-digital-engagement.html "The future for financial services is digital engagement") provider if it had robust identity verification measures, like this, in place.

**Putting [customer experience](https://www.financedigest.com/the-new-client-adviser-experience-in-the-age-of-the-customer.html "The New Client-Adviser Experience in the Age of the Customer") at the heart of identity verification**

[Financial services](https://www.financedigest.com/what-can-we-learn-from-financial-services-security.html "What can we Learn from Financial Services Security?") companies typically treat every customer as a potential threat and implement lengthy verification processes to ensure low risk. As a result, [consumers often grapple with clunky authentication](https://www.financedigest.com/consumers-in-the-covid-era-can-learn-to-embrace-strong-customer-authentication.html "Consumers in the COVID era can learn to embrace strong customer authentication") processes. This often leads to them [abandoning the process entirely and drop-off rates can be as high as 75% during the sign-up process if the customer](https://www.financedigest.com/how-strong-customer-authentication-can-prevent-cart-abandonment.html "How Strong Customer Authentication can Prevent Cart Abandonment") experiences too much friction.

With [digital identities](https://www.financedigest.com/why-an-orchestrated-digital-identity-strategy-is-vital-for-financial-organisations-in-fighting-fraud.html "Why an orchestrated digital identity strategy is vital for financial organisations in fighting fraud"), customer onboarding is faster and more convenient. The [customer just needs to take a photo of their physical ID and a selfie when they go through an online](https://www.financedigest.com/online-marketplaces-embracing-embedded-finance-to-benefit-both-customers-and-vendors.html "Online marketplaces: embracing embedded finance to benefit both customers and vendors     ") onboarding journey for the first time. Both are then checked for authenticity and compared quickly, thanks to AI, and it can then be determined as to whether the two match and the person is who they claim to be. What’s more, customers can securely store their personal information in their [digital identity on their mobile phone](https://www.financedigest.com/snap-happy-79-of-brits-ditch-digital-cameras-in-favour-of-phone-photos.html "Snap Happy: 79% of Brits ditch digital cameras in favour of phone photos") and have it available whenever and wherever they need it, reducing the time spent on future verification to mere seconds.

Whilst financial services are at the beginning of the journey of embracing [digital identities for verification](https://www.financedigest.com/what-is-id-and-verification-and-why-is-it-such-an-integral-part-of-digital-life.html "What Is ID and Verification and Why is it Such an Integral Part of Digital Life?"), the reality is that consumers are already growing accustomed to them. Our research revealed that half of Brits (50%) constantly or often have to use their [digital identity to access their online accounts and verify their identity as a result of the pandemic, and with the UK government moving toward the use of digital identities to tackle fraud](https://www.financedigest.com/fraud-in-a-mobile-digital-world.html "FRAUD IN A MOBILE DIGITAL WORLD"), this is the most logical step for financial institutions.

**Enhance the power of** [digital identity with biometrics](https://www.financedigest.com/taming-the-new-wild-west-how-biometrics-can-help-the-ecb-deliver-a-secure-digital-euro.html "Taming the ‘new wild west’: how biometrics can help the ECB deliver a secure digital euro")

Biometric technologies can significantly enhance [security measures without adding unnecessary friction](https://www.financedigest.com/fintechs-must-remove-security-and-compliance-friction-to-unlock-new-growth.html "Fintechs Must Remove Security and Compliance Friction to Unlock New Growth") to the process. For example, facial recognition with liveness detection can [prevent spoofing attacks](https://www.financedigest.com/preventing-an-operationally-crippling-ransomware-attack-do-you-know-where-your-risk-exposure-lies.html "PREVENTING AN OPERATIONALLY CRIPPLING RANSOMWARE ATTACK –  DO YOU KNOW WHERE YOUR RISK EXPOSURE LIES?"). Going one step further, adding an independent, app-based biometric allows for easy two-factor authentication, whilst simultaneously ensuring users continue having [access to their accounts](https://www.financedigest.com/assetz-capital-launches-new-90-day-access-account-bonus-cashback-offer.html "Assetz Capital launches new 90-Day Access Account with bonus cashback offer") – even if they lose or switch their device.

For financial services, coupling [digital identity solutions with biometric verification is crucial](https://www.financedigest.com/can-i-please-speak-to-someone-why-building-relationships-is-still-crucial-in-digital-payments.html "“Can I please speak to someone?” Why building relationships is still crucial in digital payments") in protecting customer information through accurately verifying user identity. The majority of UK adults (71%) say that they feel comfortable using biometric identity verification to use [online financial](https://www.financedigest.com/5-steps-to-strengthening-your-online-financial-security.html "5 Steps to Strengthening Your Online Financial Security") services, from their fingerprint (52%) to their face verification (36%), making it clear there is a gap in the market for more up-to-date verification measures. In fact, [consumers say](https://www.financedigest.com/citigroup-says-will-close-russian-consumer-commercial-business.html "Citigroup says will close Russian consumer, commercial business") they’d be happy to use biometric identity verification when carrying out a range of financial actions, from bank transfers to setting up direct debits, verifying purchases, and more. A third of consumers would even be happy to do this every [time they log into their account](https://www.financedigest.com/its-time-for-real-time-accountancy.html "It’s time for real time accountancy ").

Combining biometric technologies with [digital identity verification ensures](https://www.financedigest.com/42-of-retailers-say-payment-over-time-solutions-are-very-important-to-ensuring-future-digital-innovation.html "42% of retailers say payment-over-time solutions are ‘very important’ to ensuring future digital innovation") customers are protected on all fronts. Financial organisations leveraging this as part of their identity checks can benefit from remote identification and verification, removing the need for human intervention and in turn [reducing costs](https://www.financedigest.com/home-start-lincolnshire-implements-flexible-unified-communications-service-to-reduce-costs.html "HOME-START LINCOLNSHIRE IMPLEMENTS FLEXIBLE UNIFIED COMMUNICATIONS SERVICE TO REDUCE COSTS"), providing an entirely self-service user journey and a fast, seamless and convenient experience.

**Get [ahead with digital](https://www.financedigest.com/the-future-of-fintech-forging-ahead-with-digital-transformation.html "The future of fintech: Forging ahead with digital transformation") identity**

With digital fraud continuing to accelerate, it’s crucial that [financial services](https://www.financedigest.com/the-future-of-financial-services-tech-evolution-not-revolution.html "The future of financial services: Tech evolution not revolution ") businesses get ahead of the curve and start, or continue, to embrace digital identities to protect their customers from such risks. While two-thirds of consumers believe their bank has done more to [protect them against fraud](https://www.financedigest.com/protect-your-organisation-from-fraud.html "Protect your organisation from fraud") and online identity theft since the pandemic, only a third (34%) say this is as a result of implementing more online identity checks. It’s [time for financial institutions to change this by tapping into the growing appetite for digital](https://www.financedigest.com/playground-xyz-study-finds-carbon-emissions-from-digital-ads-fall-by-63-on-average-when-measured-and-optimized-for-attention-time.html "Playground xyz study finds carbon emissions from digital ads fall by 63% on average when measured and optimized for attention time") identity in order to remain competitive, but crucially, tackling identity-related fraud head on.


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