Digital ID in the UK: what comes next? A techUK perspective

Digital ID in the UK: what comes next? A techUK perspective

The digital id landscape in the UK has seen seismic shifts over the last 12 months, following years of fairly incremental progress.

Digital identity verification refers to the process of confirming a person's identity, attributes (such as age), legal status, or even the authenticity of a document through secure and increasingly user-friendly technologies. Enabled by advances in biometrics, blockchain, and privacy-preserving software, digital ID systems are helping to streamline access to the digital economy while reducing fraud. However, while the technology has been racing forward, UK policy has lagged behind other nations.

Until now.

Over the past year, digital identity has dominated headlines, with the change in government showing a clear commitment to driving adoption. This renewed political will has brought both opportunities and challenges for the private sector.

In January 2025, the UK Government announced plans for the GOV.UK Wallet - a digital platform providing citizens with access to official credentials, starting with a mobile driving licence and expanding to passports and other documents by 2027. As part of the GOV.UK One Login programme, the aim is to modernise services, cut costs, and strengthen the UK's position in digital service delivery for citizens.

While the promise of efficient, citizen- focused services is welcomed, the announcement raised immediate concerns for many digital ID companies - particularly among providers who have made substantial investments in aligning with the Government's Digital ID and Attributes Trust Framework (DIATF) as designated by the Data Use and Access Act. There is real apprehension that existing use cases provided by the private sector could be displaced, leading to reduced investor confidence in the UK market and increased uncertainty about the long-term role of private sector ID providers.

Digital identity can simplify processes, improve resilience, and deliver better public services. If current systems integrate private-sector digital ID solutions, this could be a positive step. However, the devil is in the details.

The private sector status quo

In the UK, recent momentum has led to exciting use cases emerging in this nascent industry. Digital ID can be used for proving your right to work or rent in the UK, access online services like banking, verifying age, onboarding new customers at scale or proving your're identity on social media platforms. The economic scale of this market is impressive, the UK currently hosts around 270 active digital identity companies, generating an estimated £2bn annually.

This progress MUST be bult upon, not undercut by confusing or overlapping government policy. Policymakers must now expand digital ID use cases.

This growth has been largely driven by private sector innovation, occurring not as a result of regulation but in spite of it. Brining new digital services within the socpe of the Trust Framework has proven slower than anticipated. In 2021, the Government announced plans to allow employers and landlords to use Trust Framework-certified providers for Right to Work and Right to Rent checks, parallel to proposals for DBS checks to also come within scope. To this day, these checks remain the primary use cases within the Trust Framework, whilst other countries have made marked progress in their digital identity frameworks.

Recent signs are encouraging however. For example, new HMT and DSIT guidance on embedding digital ID into Anti-Money Laundering (AML) checks are being developed. KYC, KYB, and AML services have become core offerings for many digital ID providers; DSIT research found that 85% of providers serve the financial and professional sectors. Similar forms of digital authentication, for example qualified electronic signatures are also being deployed to simplify registration by HM Land Registry. 1

The next step is to accelerate adoption across the economy-in financial services, retail, law, telecoms, healthcare, public service delivery, travel, and beyond. Some pilots have already been run; now is the time for scale.

To realise the benefits of digital ID, government should prioritise:

Fairness

• Ensure clarity, fairness, and equivalence between public- and private-sector digital ID solutions.
• Embed digital ID across government and enable data sharing through information gateways critical to market success.
• Implement the Trust Framework fairly.

Adoption

• Deliver on private-sector use cases by setting adoption targets and opening new market opportunities.
• Run awareness campaigns on the benefits of digital ID, engaging both the public and civil society.

Growth

• Empower sector-specific regulation and protections.
• Strengthen international cooperation and support.

How is techUK doing this?

techUK and industry partners have been engaging closely with government on these issues, culminating in a joint event with the Office for Digital Identities and Attributes (OfDIA) and the Government Digital Service (GDS) on 14 May 2025. At the event, the Secretary of State reaffirmed support for a strong private-sector role, outlining a "mixed model" in which the GOV.UK Wallet delivers public-sector use cases, while private providers access opportunities via the Data (Use and Access) Bill's information gateway pathway.

This was a welcome step-but significant questions remain around regulatory fairness, credential portability, and the risk of a de facto monopoly if private-sector opportunities are not expanded.

To turn this into action, industry is calling for swift legislative action, innovation sandboxes, and a clear, long-term policy framework. techUK believes this should take the form of a ten-year Digital ID strategy co-developed with industry, setting adoption targets, unlocking use cases, and giving the market long-term certainty.

A strategy of this kind-similar to the National Quantum Strategy-would give the sector the stability it needs to scale, boost productivity, and transform services. With OfDIA and GDS now both under DSIT, the timing is right for bold action, aligning the UK with leaders like Singapore, Estonia, and South Korea.

At a time of market uncertainty, the UK must pair investment in GOV.UK Wallet with a plan that drives private-sector adoption, safeguards competition, and positions the country as a global leader in secure, citizen-focused digital identity.