Banks in the UK urge the financial sector to initiate the Digital Company ID, a proposal by CFIT, promptly
News Article: CFIT Advocates for Widespread Adoption of Digital Company ID to Combat Economic Crime
In a recent panel discussion hosted by the Centre for Finance, Innovation and Technology (CFIT), industry leaders discussed the need for a more robust approach to combat financial crime and fraud. The event, titled 'Fighting Economic Crime through Enhanced Verification: Coalition Showcase', was moderated by Leon Ifayemi, director of coalitions and research at CFIT.
Steve Smart, the Financial Conduct Authority's joint executive director of enforcement and markets oversight, emphasized the importance of Big Tech companies in the fight against online scams and fraud, as 75% of fraud begins on the internet. He also highlighted South Asia as a region where the UK can learn from in the fight against financial crime. However, Smart did not mention any specific countries he thinks are lagging behind in their approach to tackling financial crime.
Smart also pointed to France as a leading European country in tackling financial crime, praising French regulators for being focused, quick, and willing to accept some risk. Charlotte Crosswell, chair of CFIT, moderated a Fireside Chat with Smart, during which he urged the UK to "do more internationally" in the fight against economic crime, as jurisdictional boundaries don't matter for the criminal.
The proposal for the widespread adoption of Digital Company ID, presented by CFIT, aims to create a secure, verifiable digital identity for companies to streamline verification, reduce fraud, and enhance compliance in financial transactions. Aisling Twomey, Monzo's senior financial crime manager, suggested that a company ID could help banks, such as Monzo, spot financial crime seven to 10 days sooner. Phalé McMillan, head of financial crime risk management and deputy group MLRO at NatWest Group, stated that corporate ID will help businesses identify customers and manage risk.
Mark Devlin, managing director client services, business and commercial banking at Lloyds Banking Group, stated that Digital Company IDs have been tried but not implemented. He urged the financial services industry to collaborate to get past the proof of concept and maximize the opportunity. Twomey also mentioned that getting CFIT's Digital Company ID live could provide an opportunity to test and learn, and that it doesn't mean they can't make changes and develop further down the road.
The panel included representatives from Lloyds Banking Group, Monzo, and NatWest Group. However, no new information was provided about the Digital Company ID prototype or its progress. One of the recommendations made in the coalition's report is for CFIT, in collaboration with industry, to launch and test a fully functional Digital Company ID prototype.
Despite the lack of recent updates or legislative movements on CFIT’s Digital Company ID proposal, it is clear that the concept has the potential to improve financial crime prevention by enabling more reliable identification of entities in anti-money laundering, counter-terrorism financing, and know-your-customer processes, thereby reducing identity fraud and improving regulatory compliance. To track its status and impact on financial crime prevention precisely, monitoring CFIT’s official channels, government regulatory announcements, or financial sector reports would be necessary.
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