Learning from experience

Identity is like time – it seems simple until you realise it’s all relative. It’s that complexity that government and industry now need to wrestle with together. The consensus is that both sides can learn from the experience and build forward together with more certainty.

Let’s take a moment to consider the future this new partnership can unlock. The government’s digital wallet and credentials can be likened to the role of the Bank of England in the financial system – it acts as the identity provider of last resort.

Relying parties, such as retailers, can’t directly access what’s inside someone’s wallet – instead, they must go through a registered digital verification service (DVS). Think of these organisations as the retail banks of the identity ecosystem, with the Office for Digital Identity and Attributes (OfDIA) playing a role similar to the Financial Conduct Authority (FCA).

Of course, unlike the Bank of England or the FCA, neither the government wallet nor OfDIA are independent – but perhaps that’s a question for the next generation to solve.

The point is this: the banking system offers a useful role model for how the identity and personal data market could evolve – where a person’s data, like their money, is something they own, store securely, and choose to share through trusted intermediaries.

And here’s the other exciting thing about that analogy. The UK is the global powerhouse in financial and regulatory technology (fintech and regtech) – streets ahead of what’s brewing in Silicon Valley. We sometimes forget that. This is not just hype – it’s rooted in the real-world muscle of London, still the financial capital of the world. It’s this deep, practical, and highly specialised expertise – built in the crucible of high-trust, high-stakes finance – that’s now being unlocked for something new: a sovereign identity and personal data market.

Data economy

While the big tech giants have the global reach to roll out platforms at scale, it’s the UK that holds the keys to making the data economy actually work – in a way that fits with western democratic values. Not big tech surveillance. Not top-down state control. But something more balanced. More human. More trusted.

That’s the real prize this new government partnership holds – not just for the digital identity sector, but for the future of the UK economy. A chance to lead the world once again – this time, in building the data layer of democracy.

Now comes the hard part. For the past two decades, working in digital identity in the UK was often a lonely road – misunderstood, underfunded, and sometimes even ridiculed. Yet a small group of pioneers kept the flag flying, laying the groundwork that has now led to the creation of OfDIA – a regulatory framework that finally unlocks the innovative potential of the private sector.

With the starting gun fired, identity is now going mainstream. A new wave of ideas – powered by trusted digital credentials – is about to flood the market. But identity alone won’t be enough to survive, let alone thrive. What matters now is value.

Take banking. Customer-owned personal data stores – shared voluntarily, under their control – are a far richer source of information than anything a credit reference agency can offer. If banks became certified under the Digital Identity and Attributes Trust Framework (DIATF) and the government added a domestic PEP (politically exposed persons) flag to the wallet, they could cut compliance costs by millions.

The same goes for major recruiters, NHS trusts, and universities. With DBS certificates, HM Revenue & Customs data, qualifications, and right-to-work credentials in the wallet, time-to-hire and onboarding costs could be dramatically reduced – if these institutions become DVS certified.

Ambitious goals

This isn’t evolution. It’s disruption. Supply chains will shift. Whole new categories of value-added identity services will emerge. Startups will rush in. Competition will intensify. And current identity providers? They’ll need to level up – fast – or risk being left behind.

Meanwhile, in the short term, the tasks ahead are a bit messy and incomplete – but necessary.

First, the government has set an ambitious goal – to introduce the public to digital ID through age verification for alcohol sales by Christmas. It’s a bold target, and one we should support – but with less than six months to go, it’s a tall order. Proof of concepts will be ready, but full-scale roll-out? Unlikely. Still, the urgency is welcome.

Even if we miss the mark, it pushes the whole system forward and identity providers will have to forge new collaborations and ways of working they have not had to consider before.

More importantly, this initiative can serve a greater purpose – unlocking regulatory resistance to digital identity across the wider economy.

Right now, regulators aren’t aligned, and until they are, in-house compliance teams have no choice but to block innovation. But once the rules change, the brakes come off. Compliance professionals can become allies of change, working with technologists to enable business, not hold it back.

And when that alignment happens – regulators, compliance, and tech all pulling in the same direction – the stage is set for the real magic. For the entrepreneurs, the builders, the investors – with government setting the guardrails and the market delivering the innovation – the future won’t just be an upgrade, it’ll be a transformation.

Communication, education, and outreach programmes can transform every community – even those post-industrial regions that have been left behind. There should be no reason why people have to leave their hometowns to seek work and opportunity. We can find new and diverse ways of working once we know who we all are.

Watershed moment

In conclusion, 14 May could well be remembered as a watershed moment – not just for government and the identity industry, but for the future of the UK economy. And that’s before we even begin to explore the power of person-centric, controlled artificial intelligence (AI) – AI that serves individual creators, not big tech monopolies.

So, hats off to Peter Kyle for his bold decisions and refreshing honesty. This is a moment that demands goodwill and open collaboration. Government and industry must move as one – the stakes are too high for division. This isn’t just about digital identity. It’s about sovereignty. It’s about dignity and rebuilding trust in an age of data.

If we get this right in the UK, we won’t just be rebuilding the country and creating economic growth. We’ll empower people. We’ll unlock opportunity. And we’ll show the world how democracy can evolve – and thrive – in the digital era.

The game is now well and truly on. And everything’s to play for. Let’s rise to meet it.

David Crack is chair of the Association of Digital Verification Professionals, a trade body representing companies involved in the electronic validation of documents and digital identities.