Encouraging electronic identification verification technology

Conveyancers are required to identify and verify their clients for a long list of safeguarding reasons. For example: prevention of fraud, exposure of financial crime, aiding the reporting of suspicious activity, and identifying Politically Exposed Persons or other high-risk individuals.  This is known as Client Due Diligence (CDD) and conveyancers are encouraged to complete this activity as early as possible at the outset of a transaction.

Identity forms part of a client’s onboarding, and until relatively recently was commonly verified using certified copies of official documents, a process of visiting a professional who will take copies of identity documents and certify on them that they are a true likeness:

• one government document which verifies either name and address or name and date of birth; or
• a government document that verifies the client’s full name and another supporting document that verifies their name and either their address or date of birth.

These copies were often supported by an electronic identity check obtained from a reliable independent source.

In 2020 the pandemic necessitated the need for change.  Overnight the opportunities for clients to provide certified copies of documents to professionals regulated for AML became extremely difficult.  It was an ideal opportunity for many firms to embrace Electronic Identification and Verification (EID&V) tools, now well developed to support conveyancers’ compliance needs.

While compliance guidance supports the use of EID&V, ultimate responsibility for identity remains with the conveyancer.  It has, therefore, been necessary for conveyancers to develop an in-depth understanding of any electronic tool they choose, consider its advantages and limitations and factor these into the practice’s policies.

Today, asking for certified copies of ID seems dated, however, clearly documenting a well-understood manual approach within your firm’s policy control procedures and ensuring that your staff are well trained in this area has got to be easier than describing how biometric artificial intelligence tools undertake their verifications. It is clear to me that the EID&V provides an increasingly sophisticated, accurate, and secure identity verification, and the self-serve nature is a superior experience for clients.

But do the regulations, together with the lack of centralised certification, the number of different identity standards, and the proliferation of identity providers, prevent conveyancers from confidently embracing this technology?

I hope that the UK Digital Identity and Attributes Trust Framework, particularly the Digital Identity Trust Scheme for the Home Buying & Selling Sector will change that.

In February, the Department for Digital, Culture Media and Sport published their first ‘working’ version of the ‘UK Digital Identity and Attributes Trust Framework’.  It is a set of rules and standards that identity providers will agree to follow, setting out a clear understanding between clients using the identity products, the organisations relying on the service and the service providers themselves.

Etive technologies are leading the home buying and selling scheme, bringing together the estate agents, conveyancers, mortgage intermediaries and mortgage lenders, to develop and agree a specific set of rules around digital identities.  Etive’s core aim is to create a reusable identity removing the need for clients to endure each stakeholder’s own identity verifications because the stakeholders are unable to trust each other’s verifications.  Instead, clients will be able to share their reusable Digital Identity with each relying party.

Stopping re-verification will be an incredible leap forward, but my hope is the standardised assured approach will ease the burden on Conveyancers seeking to adopt identity technology and remain confident that they remain compliant.  Could the framework’s trust mark and the schemes’ identity certificate be enough to show compliance without conveyancers having to fully understand the inner workings of an identity tool?

My concern is that the responsibility for the verification is still placed solely on the Conveyancer and given the subjective nature of the guidelines without direct guidance, I imagine the need to fully understand the technology and the risk that represents remains a real barrier. 

Having recently spoken with Etive I am confident that this scheme is able to achieve the best result possible for all.  Yes, it’s main aim is to re-use identity, but importantly it will be aligned to HMLR ‘Safe Harbour’ principles, improve upon inclusivity that held previous initiatives back, but most importantly it has engaged with the regulators and conveyancers.  These are key objectives that align strongly with the ideas that DigitalMove has been proposing over several years.