Banks in the UK urge the industry to execute CFIT's proposed Digital Company Identification, emphasizing the importance of its implementation.

The Centre for Finance, Innovation and Technology (CFIT) has proposed the widespread adoption of Digital Company ID as a means to tackle economic crime. This recommendation comes following the work of CFIT's second industry coalition.

During a recent panel discussion, moderated by Leon Ifayemi, Director of Coalitions and Research at CFIT, representatives from Lloyds Banking Group, NatWest Group, and Monzo discussed the potential benefits of a Digital Company ID. Aisling Twomey, Monzo's senior financial crime manager, suggested that such an ID could help banks, like Monzo, "spot" financial crime seven to 10 days sooner than currently.

Charlotte Crosswell, Chair of CFIT, moderated a Fireside Chat with Steve Smart, the Financial Conduct Authority's joint executive director of enforcement and markets oversight, and executive director lead for financial crime. Smart emphasized the need for the UK to "do more internationally" in the fight against economic crime, citing South Asia as a region where the UK can learn from in terms of tackling financial crime and fraud.

Phalé McMillan, head of financial crime risk management and deputy group MLRO at NatWest Group, stated that corporate ID will help businesses to identify customers and to "focus... on managing risk". Mark Devlin, Managing Director Client Services, Business and Commercial Banking at Lloyds Banking Group, mentioned that IDs have been "tried and tested but never quite got off the ground". Devlin urged the financial services industry to "work together to get past the proof of concept", as had been done with Open Banking.

In addition to these discussions, Smart pointed to France as a European country with a focused and quick approach to financial crime. Smart's French regulator colleagues were noted for being prepared to accept a bit of risk in their approach to financial crime.

One of the recommendations made in the coalition's report is that CFIT, in collaboration with industry, should launch and test a fully functional Digital Company ID prototype. The Centre for Finance, Innovation and Technology has presented a blueprint for digital company ID and convened three industry-led working groups to build the prototype, identify use cases, and set trust and governance standards.

Steve Smart also discussed the need for Big Tech companies to be part of the solution to the rise in scams and fraud. He stated that jurisdictional boundaries don't matter for the criminal, and the UK needs to find a way to make it not matter for them. Smart further noted that 75% of fraud starts online.

Twomey added that while the implementation of Digital Company ID is a step in the right direction, it "doesn't mean we can't make changes and develop further down the road". The adoption of Digital Company ID, if successful, could provide an opportunity to "test and learn", as Twomey mentioned.

With the increasing threat of economic crime, the proposal for Digital Company ID is a significant step towards enhancing the UK's financial security. The collaboration between CFIT, industry leaders, and regulatory bodies will be crucial in the development and implementation of this innovative solution.