TISA backs digital ID plans but warns on safeguards

The Investing and Saving Alliance has submitted its response to the Cabinet Office consultation on digital identity, arguing that the issue could reshape how consumers use financial services.

TISA said a well-designed digital ID system could simplify account opening, support switching between products and reduce barriers for people who do not hold photo identification. It added that digital ID could help tackle financial crime by reducing reliance on paper documents and supporting wider initiatives such as Open Finance and the return of dormant assets.

The group also warned that any new system would need strong safeguards to win public trust. Its submission urged ministers to examine systemic risks carefully, as confidence in the system will be central to adoption by consumers and firms.

Industry concerns

Among its recommendations, TISA urged the Government to work with technology companies and mobile phone providers to address the risk of phone theft leading to identity fraud. It also called for a notification process to alert financial services firms when a digital ID is deleted, allowing them to conduct their own verification checks.

TISA also raised concerns about how a person's death would be handled within any digital identity framework. It said the Government should create an agreed mechanism to ensure financial services providers are promptly informed, both to prevent fraud and to help return account balances where funds remain held in financial products.

The organisation further called for a clear process to notify firms when a digital ID is revoked, saying this would help them identify potential fraud and decide whether any further steps to report suspicious activity are needed.

Liability was another issue highlighted in the response. TISA said financial institutions need clarity on their legal position if they accept a digital ID that is later found to have been stolen or used fraudulently.

Support for proposals

TISA also backed several aspects of the Government's approach, including allowing digital IDs to be stored in any certified digital wallet, creating a government checker service and requiring individuals by law to notify the Government when their information changes.

TISA represents around 270 member firms across the savings and investment market, including investment managers, retail banks, online platforms, insurers, pension providers, building societies, wealth managers, administrators, financial advisers, consultants and stockbrokers.

Steve Latto, Policy Executive at TISA, outlined the group's view in its consultation response.

"This is a rare opportunity for the Government to build digital infrastructure which not only improves access to public services but transforms how consumers interact with financial service providers. If we get this right, a digital ID system will reduce friction, promote inclusion and unlock innovation that benefits consumers and improves their financial journeys," said Latto.

"To deliver this, the Government needs to build a secure, scalable foundation that leaves room for the industry to innovate and develop services that directly benefit consumers. It is critical that all risks are fully understood in order to build public confidence and trust in the system," he added.

"We look forward to working with the Government, regulators and the financial services industry as these proposals progress to ensure they benefit consumers."