City of London is trying to turn fraud prevention into financial infrastructure. On Friday, the Corporation asked technology firms to help build a reusable digital identity verification network for banks and other financial institutions, arguing that the UK can no longer fight online fraud with fragmented onboarding checks alone (City AM, 8 May).
A fraud problem big enough to move the market
Under the plan, a customer would verify their identity once with a trusted provider and then reuse those credentials across multiple banks and financial services firms. The City Corporation told City AM the system could unlock almost £5bn in economic benefits over five years by cutting fraud losses and improving infrastructure efficiency.
The timing is not accidental. Fraud now accounts for roughly 40 per cent of recorded crime in England and Wales, according to government figures cited by City AM. Chris Hayward, policy chairman at the City of London Corporation, said fraud is costing banks more than £1bn a year. Separate UK Finance data, cited by Intelligent CISO on Friday, showed fraudsters stole £629.3m in the first half of 2025 across more than 2 million confirmed cases.
Why the City wants a shared identity layer
The proposal is essentially a coordination rail for digital trust: banks would not need to collect the same passport, selfie and proof-of-address packs repeatedly, and fraudsters would have fewer gaps to exploit between institutions. That matters for incumbents trying to reduce onboarding friction without weakening checks.
The City of London Corporation’s March 2025 report with EY, Securing growth: the digital verification opportunity, put harder numbers around the case. It said a secure, scalable digital verification service could unlock £1.8bn in economic value by 2031 and reduce fraud losses by at least £3bn. The report also argued that clearer rules under the Data (Use and Access) Bill would give providers more certainty on how to build and share digital credentials (City of London Corporation/EY, March 2025).
AI is changing the economics of fraud
What has sharpened the urgency is not just volume, but tooling. City AM reported that payments-industry research suggests UK consumers now see an average 185 scam adverts online each month, while fake adverts generated an estimated £3.8bn in social media advertising revenue last year. Since October 2024, banks and payment providers have also been required to reimburse most victims of authorised push payment fraud under tougher UK rules, concentrating more of the financial pain inside the sector.
That does not mean a digital ID network is a silver bullet. It will not stop every social-engineering scam, mule account or deepfake. But for London’s banks, fintechs and infrastructure suppliers, it would create a shared assurance layer at the point where many losses begin: proving who is on the other side of the screen. If the City can turn that into common plumbing rather than yet another bilateral fix, Britain’s anti-fraud strategy may finally start to scale.
Sources: City AM, 8 May 2026; Intelligent CISO, 8 May 2026; City of London Corporation/EY, Securing growth: the digital verification opportunity, March 2025.
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