Following on from our chat with Mike Harlow from HM Land Registry about Safe Harbour being a positive catalyst for change, Alastair Johnson is Founder and CEO of Nuggets, a blockchain ecommerce payments and ID platform that is redefining online security and privacy provides his insight on the Digital ID Standard.
HM Land Registry (HMLR) recently published its first Digital Identity Standard, which offers conveyancers a ‘safe harbour’ if they use it to verify their clients’ identity verification. These new requirements will not only help streamline the conveyancing process by encouraging digital identity checks, but will also significantly improve overall security for homebuyers, and drive the industry towards a clear set of standards in digital ID.
Last year HMLR recognised the need for a more secure, efficient and convenient means of identifying the parties to a property transaction. By utilizing emerging digital identity verification tools, the introduction of a more robust standard for identity checks has been ushered in. By adhering to this set of rigorous guidelines, HMLR hopes the standard, which incorporates digital solutions in place of manual processes, will act as a catalyst for technology providers and conveyancers to collaborate on developing and adopting convenient, and more secure methods of digital identity verification.
A fundamental improvement of this new Digital Identity Standard is that it will dramatically reduce levels of fraudulent activity that is associated with conveyancing and property transactions. This has been a major problem as of late, with the pandemic forcing firms to transition to remote working, making it increasingly difficult to carry out due diligence on homebuyers. With the number of housing transactions that have fallen through in the first two months of 2021, up 37% over the same period in 2020 and 46% from 2019, whilst this can be attributed to several things, it is certainly not benefited by the complex and time-consuming steps involved in the current, manual identity verification process.
Whereas, under the new standard, homebuyers will now be able to take advantage of technology that allows them to prove their identity quickly and securely with their mobile phone. Using the government’s Digital ID Trust Framework as the foundation of the requirements – which focuses on the shareability of digital ID amongst different organisations, including financial and professional services providers – HMLR’s standards go a step further than those that rely on matching a photo printed on the document with the self-taken photograph. Instead, requiring that the self-taken photograph, or a live video, is also biometrically matched to the photograph extracted from the encrypted chip, to provide a higher level of assurance of the validity of the document.
This can verify a homebuyer within seconds, and with far greater levels of trustworthiness than traditional manual ID checks, thereby profoundly improving the experience of the customer, along with its built-in benefits for the conveyancer.
To encourage firms to take action, HMLR has offered a ‘safe harbour’ to companies that have taken all measures to meet these requirements set out by the new initiative. This means that firms that have met the necessary requirements to combat fraudulent activity, will not be penalised if fraudulent activity is to still occur whilst these measurements are in place.
Cryptographic and biometric checks are multi-layered with detailed technical specifications defined within the standard, giving clarity and certainty to conveyancers that they have discharged their duty on identity verification in connection with land registration applications.
Further work is now being done by identity check providers to link clients via their Digital Identity with a particular property.
The potential use cases of a verified digital identity system are almost endless, which is why it’s hugely positive that conveyancing is at the forefront of this trend thanks to these new standards from HM Land Registry. Taking a bold step forward like this will plausibly cause many other industries to follow suit. Given the exponential rate at which digitalisation technology is being embraced, guidelines such as the ones outlined above will become increasingly common as we move deeper into 2021 and beyond.
