Key facts
- UK banks are launching a voluntary digital ID service.
- The service is separate from the government's digital identity efforts.
- Major banks involved include Barclays, Lloyds, HSBC, Natwest, Nationwide, and Santander.
- The initiative aims to combat payment fraud, which reached over £1.28 billion in 2025.
- The service is currently in a live pilot stage.
UK banks, led by UK Finance and including major institutions like Barclays, Lloyds, HSBC, Natwest, Nationwide, and Santander, have announced plans for a voluntary digital verification service. This initiative is designed to operate independently of the government's controversial digital ID efforts, which have faced significant public skepticism and political setbacks, including a U-turn on mandatory verification for UK workers.
The banks are positioning their service as a safer, quicker, and more convenient solution for digital transactions, aiming to combat the rising tide of payment fraud, which exceeded £1.28 billion in 2025. However, the initiative faces an uphill battle in gaining public trust, particularly given recent high-profile outages and data security concerns experienced by some of the participating banks. Lloyds Banking Group, for instance, experienced rogue transactions on its app and subsequent outages, issues that critics may leverage against the digital ID plans.
Reports indicate that nine of the UK's largest banks and building societies experienced a combined total of 803 hours of outages over the past two years. Barclays and HSBC were among those with the highest number of incidents. Despite these challenges, the banks argue that the new tool will provide a more reliable method for businesses to verify customers, potentially leading to reduced costs. The service is currently undergoing a live pilot phase.