The City of London Corporation has called for tech firms to support the construction of a digital identity verification network, improving security between banks and financial institutions in the fight against fraud.
The City Corporation estimate that the new system could unlock economic benefits of nearly £5 billion over five years through reducing the financial losses of fraud and the efficiency from improved infrastructure.
In the first half of 2025 alone, fraudsters stole £629.3 million, a 3 per cent rise from 2024, according to UK Finance, with over 2 million confirmed cases.
The digital identity verification network would verify a person’s identity once with a trusted provider and then allow them to reuse those credentials across banks and financial services institutions, creating a shared security between providers.
Chris Hayward, policy chairman at the City of London Corporation, said that fraud was costing banks over £1 billion a year.
Responding to the news, Dr Janet Bastiman, Chief Data Scientist at Napier AI, commented: “The volume and sophistication of fraud attempts, through threats such as AI-deepfakes and synthetic personas, means fighting the fraud epidemic has to rely on technology to keep up. The challenge facing banks and financial institutions is as much about continuously monitoring behaviours and transactions as it is the initial onboarding, requiring explainable AI to scan for suspicious activity and fraud signals in real-time. Adding that to a shared digital verification framework can build a defence layer behind initial verification, combining shared credential access with always-on risk monitoring.”
“As a predicate crime to money laundering, detecting and preventing instances of fraud can be key to stopping larger, more complex crimes. Money laundering costs the UK $195 billion per year, according to our AI / AML Index, and using technology to tackle predicate crime such as fraud can play an important role in bringing that number down and saving the UK economy billions.”
A Home Office report found the total economic and social cost of fraud in the UK reached £14.4 billion in YE March 2024, across the anticipation, consequences and response of fraud.
Of that, £9.2 billion was estimated to be fraud against individuals, with £5.2 billion estimated against businesses.
Image provided by The City of London Corporation
