The UK risks losing its position as a global financial hub unless it rapidly upgrades its digital verification infrastructure.

A new study from EY and the City of London Corporation warned that delays in establishing a government-backed, scalable digital verification system (DVS) could cost the UK billions in economic benefits.

Meanwhile, it is increasing businesses and consumers’ vulnerability to fraudulent behaviour.

With major economies like the US and EU racing ahead with national digital ID frameworks, the report urged the UK to implement a robust DVS as soon as possible, or risk being left behind in the fintech revolution.

The cost of inaction

The financial sector across the UK has faced the problem of mounting fraud losses in banking-related theft, with compliance costs for the sector increasing.

Over the past two years, nine of the UKs banks went offline for over 800 hours, disrupting millions of customers’ access to their funds.

Between January 2023 and February 2025, the Treasury Committee recorded 158 IT failures at major UK banks.

Meanwhile, consumer trust remains fragile, yet this report revealed that a well-designed DVS could help mitigate these concerns.

What’s more, it suggested this move could unlock an estimated £4.8bn in benefits by 2031 through reduced fraud and improved efficiency.