The Role of Digital Identity Verification in Transforming Wealth Management

Posted on July 24, 2025 by Sara West

The Role of Digital Identity Verification in Transforming Wealth Management

The wealth management industry is undergoing a significant digital transformation, driven by evolving client expectations, rising financial crime, and increasingly stringent regulatory requirements. In this rapidly changing environment, Digital Identity Verification (IDV) has emerged as a critical solution, helping wealth managers meet compliance obligations, mitigate fraud risks, and deliver streamlined, secure client experiences.

Digital Identity Verification: Future-Proofing Wealth Management

Wealth management firms face a unique challenge: high-net-worth clients demand seamless, digital-first experiences, yet this makes firms attractive targets for sophisticated fraud. Financial crime continues to evolve, with threats such as synthetic identities, deepfake technology, and complex investment scams putting traditional verification tools under pressure. Regulatory bodies, including the UK’s Financial Conduct Authority (FCA), have identified the sector as high-risk, increasing scrutiny and penalties for compliance failures.

The risks of inaction are stark. Firms that fail to keep pace risk severe regulatory penalties, reputational damage, and operational disruption. In recent years, some firms have suffered public censure, substantial fines, and mass client withdrawals following high-profile breaches of anti-money laundering (AML) requirements. Financial and reputational losses are often compounded by the cost of remediation and increased regulatory oversight.

‘The last 4 years, leading up to 31 March 2025 saw a 164% increase in the number of financial crime cases opened by the FCA’

(Source: FCA, Annual Report and Accounts, 2024 – 2025)

Despite these risks, many firms hesitate to adopt digital IDV solutions, with concerns often circling around data privacy, technical complexity and client acceptance. However, these barriers are largely the product of stubborn legacy thinking not having kept pace with the nature of how technology has evolved. The days of manual processing or possibly worse, use of outdated, legacy IDV vendor solutions, do not reflect those solutions designed for ease of integration, robust privacy protections, and enhancement of – rather than hindering – the client experience.

The adoption of digital IDV begins with understanding the specific needs of a business. These include aligning technology with jurisdictional compliance standards, ensuring compatibility with existing systems, and selecting solutions that reflect the expectations of modern, digitally-savvy clients. Leading platforms offer advanced features such as biometric authentication, liveness detection, AI-powered fraud detection, and real-time verification against global databases. Together, these tools create a robust defence against emerging threats while delivering a frictionless client journey. And moreover, selected wisely, do not mean upsetting the CFO with eye-wincing cost commitments.

Successful implementation isn’t just about technology though – it requires process alignment and people engagement. Comprehensive staff training ensures teams understand and trust the new systems, integrating them smoothly into existing workflows. Pilot programs can help firm refine processes before full-scale rollout, minimising disruption and confirming the solution meets both regulatory requirements and client expectations. Continuous performance monitoring ensures solutions deliver on their promises, with key indicators such as onboarding speed, compliance adherence, and client satisfaction providing valuable feedback.

Although regulatory adherence is the primary driver, the benefits of digital IDV extend well beyond compliance. Automating identity verification processes reduces the cost and inefficiency of manual checks, freeing up valuable resources and allowing firms to scale without adding significant headcount. AI-driven platforms in particular provide more consistent and accurate verification, delivering faster onboarding with improved client satisfaction – whilst simultaneously reducing the risk of costly errors and compliance failures.

Reusable identity verification is a step further, offering even greater enhancement to customer journey flows. This solution supports an individual completing a one-off verification of their identity and then using this multiple times with the same business when signing up to new products/services without the need for repetitive verification steps. By adopting a reusable identity verification system, wealth management organisations can further streamline their processes, reduce redundancy, and save valuable time in verifying the identity of customers or clients, allowing them to focus on their core competencies rather than getting bogged down by repetitive verification tasks. In addition, Reusable Identity Verification is not only 5 times quicker, but cheaper, offering more control and providing a better long-term user-experience.

As such, IDV technology positions firms for future growth. As wealth managers expand across borders, scalable compliance solutions become essential and modern platforms support global operations with ease, ensuring consistency and confidence wherever clients are located. Advanced fraud detection helps firms stay ahead of evolving threats with modern solutions verifying identities against extensive global watchlists and databases, flagging risks such as politically exposed persons (PEPs), sanctions, and adverse media. This proactive approach strengthens protection against financial crime while safeguarding both clients and the firm’s brand reputation.

Trust remains the foundation of wealth management. A secure, streamlined onboarding process sends a powerful message: client assets and data are protected to the highest standards. Enhanced security measures, from encryption to biometric verification, reinforce this trust, which is critical in an industry where reputation underpins success.

Beyond security and compliance, digital IDV provides valuable insights. Data analytics from onboarding processes can inform strategy, improve client engagement, and drive long-term loyalty. Ethical data handling practices, with clear transparency around biometric and AI-derived data, further bolster trust and align with growing ESG expectations.

Ultimately, in a sector built on reputation, digital IDV is not just a defence against risk, it’s a catalyst for operational excellence, client satisfaction, and sustainable growth in a fast-evolving digital world.

Sara West, Commercial Officer, ID-Pal

To learn more, please download ID-Pal’s latest eBook: ‘A Guide to Preventing an Identity Crisis in Wealth Management’ that offers a practical roadmap for protecting firms from identity fraud and regulatory penalties

PIMFA Response to FCA CP 25-13 – Improving the Complaints Reporting process

Posted on July 22, 2025 by Yasmin Ataullah

The Government Cyber Governance Code of Practice – it’s a question of leadership

Posted on July 18, 2025July 21, 2025 by Lindsay Hill

The Government Cyber Governance Code of Practice – it’s a question of leadership

The government is continuing to press UK businesses to take a stronger approach to improving cyber resilience and ensure that all organisations of all sizes are prepared for cyber incidents. To this end, the government recently launched the Cyber Governance Code of Practice. The intention is to highlight the fact that cyber risk should have at least the same prominence as financial or legal risks, and the responsibility and ownership of cyber resilience is a board level matter.

Why is the government doing this?

This is hardly surprising given the increase in serious disruption to businesses across the country caused by cyber-attacks, largely driven by organised criminal gangs based overseas. Ransomware attacks take businesses down for many weeks or months at a time and can leave them permanently crippled. The average ransom payment in 2024 was £1.5 million (National Crime Agency) but can run into many millions of pounds. Business email compromise is rife (across all sectors), frequently resulting in significant sums being lost by businesses and their clients. Yet despite all this, the 2024 government cyber breach survey found that over 80% of businesses have still not carried out a cyber security vulnerability audit, and over 70% have no formal incident response plan in place. The government believes that many boards and senior leaders have a lack of understanding of cyber issues, with little or no meaningful oversight of this business-critical risk. Indeed, it is often delegated to technical people and not looked at in the context of wider business risk management.

Who is the Code aimed at?

It is aimed at directors, non-executive directors and other senior leaders. It formalises the government’s expectations regarding an organisation’s governance of cyber security and sets out the clear actions that leaders need to take to meet their responsibilities in managing cyber risk. It will of course be of interest to other stakeholders in a business, including shareholders. It should make for essential reading for all private equity investors. It is designed to have application to businesses of all sizes and in all sectors. The government in particular says that it expects it to be implemented by companies employing 50 or more staff.

Will it be compulsory?

At this stage, adherence to the Code will be voluntary. It will supplement the existing obligations which any business already has under data protection legislation and the relevant regulatory environment. However, given the drastic increase in cyberattacks over the past year, including several headline-making breaches, the ICO will certainly be taking a failure to adhere to the Code into account in the event of a personal data breach. The ICO has already stated that it expects to see clear evidence of management oversight of cyber risk, including regular reviews, with business leadership ensuring appropriate resources are provided to enable a proper information security programme. Interestingly, the government says that it will be exploring how the Code can also be used to support sector regulators to help with regulatory compliance. Additionally, it says that it expects to establish an accompanying assurance scheme to be rolled out at a later date. And finally, whilst the Code will initially be voluntary, depending upon take-up, it could be the subject of future legislation.

What does the Code say?

There are 5 main themes. Here are some of the actions.

Risk management: This includes identifying important processes and services; conducting regular cyber risk assessments; and implementing the appropriate controls and mitigations. Ownership of risks should be at board level. Supplier and business partner risks should also be routinely assessed.

Cyber strategy: Boards should have a cyber resilience strategy having regard to their level of accepted risk and legal and regulatory obligations. To be monitored and reviewed as the risk environment changes, with sufficient allocation of resources and investment.

People: Boards should ensure the importance of cyber resilience is communicated to all staff with clarity on the cyber security policies supporting the right culture. There should be training for the board itself and the rest of staff and its effectiveness should be measured.

Incident planning and response: The plan to respond to and recover from a cyber incident should be tested at least annually. In the event of an incident, the board should take responsibility for individual regulatory obligations and ensure a post incident review process.

Assurance and oversight: The board should establish a governance structure, to include a regular monitoring process with defined responsibilities and ownership for executive and non-executives. Formal board reporting should take place at least quarterly. Cyber resilience should be integrated across both internal and external assurance mechanisms.

What is the upshot?

The upshot is that if cyber security is not at or near the top of your register of business risk, then it should be. And it is the board that must accept responsibility for understanding it, managing it, and providing oversight. In other words, a top-down approach.

Lindsay Hill – Chief Executive Officer, Mitigo Group

lindsayhill@mitigogroup.com

Chancellor sets out Financial Services Growth and Competitiveness Strategy in Leeds Reforms

The Chancellor has set out the Leeds Reforms and delivered her annual Mansion House speech to the financial services sector. Launching the Financial Services Growth and Competitiveness Strategy, she outlined the next step in the government’s economic plan.

The Growth and Competitiveness Strategy feeds into a number of substantive changes to the overarching regulatory framework for financial services with the government aiming to

Have shorter statutory deadlines for regulators to determine key firm applications;
Impose a requirement for regulators to produce long term strategies with clear goals and priorities; and
Rationalise how various legislative ‘have regards’ feed into regulatory policymaking.

As part of the Leeds Reforms, the government has set out a number of initiatives of interest to PIMFA and PIMFA members; namely:

Review of the Financial Ombudsman Service: This consultation sets out findings from the EST’s review of the FOS and proposed reforms. The Treasury is consulting on reforms which include:
- An adapted ‘fair and reasonable’ test which will require the FOS to find that a firm’s conduct is fair and reasonable where it has complied with FCA rules;
- A requirement for the FOS to seek a view from FCA in instances where there is regulatory uncertainty as well as providing firms with opportunity to request this; and
- The introduction of a 10 year long stop for complaints subject to certain exemptions which the FCA will set out in DISP rules.

There are a number of other provisions related to mass redress events, which are also captured by the FCA’s consultation on Modernising the redress system which builds on its previous Discussion Paper on this matter.

At present, we are very enthusiastic about the reforms put forward. In our representations to HMT on this issue we have stressed the need for any reforms to maintain consumer protection whilst also providing firms with certainty and clarity to invest, grow and innovate. On balance, we believe this package of measures achieved this. We would welcome views from firms on this consultation. Firms are invited to contact Simon Harrington to discuss further.

Financial Conduct Authority CP25/21: Senior Managers and Certification Regime review: In parallel with HM Treasury (HMT), the Financial Conduct Authority (FCA) and the Prudential Regulation Authority have published consultation papers setting out reforms to the Senior Managers and Certification Regime (SM&CR). The reforms aim to reduce the burden on firms and make the requirements clearer and more efficient, e.g.:

- More time and flexibility to submit applications for approving new senior managers when there has been an unexpected or temporary change.
- Removing duplication where the same individuals are certified for separate functions (to reduce the number of certification roles by 15%).
- Guidance on how to streamline the annual checks firms need to undertake to certify individuals are ‘fit and proper’ to do their role.
- More time for firms to report updates to senior manager responsibilities.
- Increased periods for validity of criminal record checks for senior manager applications, prior to application submission.
- Help firms better understand the definition of certain senior management function roles.
- Give firms more time to update the FCA directory.

Reforming the Senior Managers & Certification Regime: HMT’s consultation proposes to remove the Certification Regime from legislation. Other proposals set out aim to:

- Reduce the overall number of senior managers through greater flexibility for the regulators in specifying the list of Senior Management Functions requiring regulatory pre-approval.
- Allow firms to appoint certain senior managers without pre-approval by the regulators.
- Remove prescriptive legislative requirements relating to the provision, maintenance and updating of Statement of Responsibilities.
- Industry feedback on whether any requirements in legislation for the Conduct Rules create a disproportionate burden is also requested.

Firms are invited to contact Alex Roberts or Yasmin Ataullah for further information and to feed in your comments.

UK Green Taxonomy Consultation response: The government has concluded that a UK Taxonomy would not be the most effective tool to deliver the green transition and should not be part of its sustainable finance framework. Whilst the government’s ambitions to continue as a global leader remain unchanged, the consultation responses showed that other policies were of higher priority to accelerate investment into the transition to net zero and limit greenwashing. The government will focus on delivering the plans that respondents have said will have the greatest impact and will consider how best to align its ambitious policies to support investors to make investment decisions. This will help the UK accelerate investment into the global transition to net zero and nature restoration. Maja Erceg led on PIMFA’s response to this consultation, which can be found here, and firms are invited to discuss with her further.

The Berne Financial Services Agreement: HMT and the Federal Department of Finance of the Swiss Confederation have signed a ground-breaking agreement to enhance the cross-border market access of financial services between the UK and Switzerland. The Berne Financial Services Agreement will serve to strengthen the long-standing trade and financial services relationship between the UK and Switzerland, whilst simultaneously fortifying their statuses as two of the most important global financial centres. This dynamic new agreement uses outcomes-based mutual recognition of domestic laws and regulations and facilitates cross-border trade in financial services to wholesale and sophisticated clients. It includes a set of safeguard mechanisms to ensure consumers, investors, markets and financial stability are all protected. The Government hopes this agreement will provide a blueprint for future mutual recognition agreements. Please contact Maja Erceg to discuss further.

Targeted Support: In support of FCA proposals set out in its consultation Supporting consumers’ pensions and investment decisions: proposals for targeted support the government has published a policy note setting out proposed changes to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. Firms should be aware that we will be discussing the FCA’s proposals at an Advice Guidance Working Group meeting on 22 July. Interested firms should contact Simon Harrington if they wish to attend.

Digitisation Taskforce Final Report: The Digitisation Taskforce has delivered its final recommendations for modernising the UK shareholding framework. A staged approach to removing paper share certificates and ultimately moving to a fully intermediated system of shareholding in the UK is recommended, and the government has accepted it, and set out an implementation plan.

By 31 December 2027, current paper share registers should be replaced by digitised versions – maintaining the services that paper shareholders receive today, but in digital form. An industry Technical Group should finalise the implementation details. Over the course of this Parliament, the government, regulators and the Technical Group will work to improve the intermediated system to ensure shareholders can exercise their rights effectively and efficiently through intermediaries. The report recommends a package of measures to achieve this and the government will set criteria to be met before the final step, which will see all shares transition into the intermediated system. The Technical Group will consider how best to deliver this final stage. Please contact Kevin Sloane for more details.

Integration: Where consolidation strategies stand or stall

Exploring the breadth of private assets available to wealth managers

Redefining Risk: Women, AI, and the Democratisation of Investing

Efficiency, Scale, and Growth: The Back-Office as a Strategic Asset

Culture as a risk lens: Evolving the art and science of fund research

An AI for an AI- Artificial Intelligence as a sword and a shield in the battle against fraud

PIMFA Journal Edition #31

Posted on July 17, 2025July 25, 2025 by Nigel Ross-Scott

PIMFA response to Financial Ombudsman Service: Interest on compensation awards

Posted on July 2, 2025July 25, 2025 by Simon Harrington

Nedbank Private Wealth Chief Executive joins PIMFA’s Board

Posted on June 30, 2025June 30, 2025 by Amanda Wall

Since joining Nedbank Private Wealth, the business has significantly invested in technology, digital client experience and data. Today he has overall responsibility for managing the company’s UK and international Wealth operations across all its office locations outside of South Africa.

During his career, Stuart has undertaken senior roles in Cazenove Capital, C. Hoare & Co. and Barclays Wealth. His focus has been on developing high-net-worth relationship and advice businesses across wealth management, private banking and corporate banking. He is also a Chartered Wealth Manager, Fellow of the Chartered Institute for Securities & Investment, and a Fellow of the Chartered Institute of Bankers.

Stuart Cummins, Chief Executive Officer, Nedbank Private Wealth said: “I am delighted to be joining the PIMFA Board.

PIMFA has a critical role to play, especially at this time of rapid and far-reaching change across the political and economic landscape. I look forward to working with the existing Board members and the PIMFA team, to develop an environment where firms and their clients can thrive”.

Liz Field, PIMFA’s Chief Executive said “I am delighted to welcome Stuart to our board of Directors and look forward to working with him to continue to represent this vital industry.

Building a robust, innovative and flourishing industry is at the heart of all we do as well as continuing to drive impactful change for our firms and clients, and Stuart’s expertise and experience will be invaluable in achieving this goal.”

ENDS

NOTES TO EDITORS

About PIMFA

• PIMFA (the Personal Investment Management & Financial Advice Association) is the trade association for firms that provide wealth management, investment services and the investment and financial advice to everyone from individuals and families to charities, pension funds, trusts and companies.

• The sector currently looks after £1.65 trillion in private savings and investments and employs over 63,000 people.

• PIMFA represents both full and associate member firms. Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families to charities and pension funds, all the way to trusts and companies.  Associate members provide professional services to the PIMFA community.

• PIMFA leads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena. Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments.

• PIMFA was created in 2017 as the outcome of a merger between the Association of Professional Financial Advisers (APFA) and the Wealth Management Association (WMA) with a history as a trade association since 1991 – read more.

• Further information can be found at pimfa.co.uk

Contact

For further information on this release or other press matters please contact:

Sheena Gillett, PIMFA Communications & PR Director – sheenag@pimfa.co.uk, +44 (0)20 7011 9869 / +44 (0)7979 493225

PIMFA response to Euroclear consultation paper

Posted on June 20, 2025July 21, 2025 by Kevin Sloane

PIMFA Journal Edition #30

Posted on June 19, 2025July 25, 2025 by Carly Norman

PIMFA Financial Crime Compliance Programme: Prepare Your Firm on All Fronts to Meet FCA Financial Crime Compliance Expectations

The increased regulatory focus and the rapidly changing threat landscape demands a more sophisticated approach to financial crime risk management.

How do PIMFA member firms strengthen their defences and stay resilient?

Launching in Autumn 2025, PIMFA’s new monthly CPD learning programme ensures busy MLRO/DMLOs and Heads of Compliance have the confidence, skills and competencies to:

1. Effectively implement and respond to the latest FCA requirements.

2. Identify and address vulnerabilities in your approach to financial crime compliance.

3. Thoroughly prepare your firm to respond to key regulatory changes in 2025 and beyond.

4. Ensure your enterprise-wide risk assessment drives positive organisational change.

5. Follow industry best practice approaches to KYC, CDD and EDD.

6. Calibrate your AML controls, policies and control frameworks to your firm’s risk profile.

Programme Partners

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By registering your interest to PIMFA’s AI Leadership in Wealth Management Programme you consent to being updated and informed about forthcoming training, webinars, podcasts and thought leadership on Customer Vulnerability offered by PIMFA. This consent can be withdrawn at any time by emailing learning@pimfa.co.uk. *

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PIMFA AI Leadership in Wealth Management Programme: From Basics to Practical Implementation

AI is transforming the sector, yet many leaders in wealth management remain unsure how to harness this transformative technology strategically.

Standard online tutorials and outdated training on AI often create more confusion than clarity. The ‘AI Leadership in Wealth Management programme’ aims to fix that. Whether you're new to AI or already experimenting with it, this geek and jargon-free programme supports senior managers in PIMFA member firms to:

1. Make sense of what AI is and how it is deployed in wealth management.

2. Understand and follow the FCA’s latest guidance on AI.

3. Explore Your AI Readiness, deciding with confidence when and how to adopt AI ethically in your firm.

4. Build an AI implementation plan to solve a specific business challenge.

5. Develop, with the support of expert’s, how to execute their AI implementation plan.

Register Your Interest

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Digital Membership

By joining PIMFA, your digital membership not only strengthens the voice of the sector, but also grants you a host of benefits. Through your personalised website experience you will gain access to online resources, events, learning guidance and regulatory insights.

If you are part of a financial advice or planning firm with less than five advisers/financial planners, all this is available to you for just £500 a year. Please complete this form to start your experience.

Digital Membership – IFA and Financial Planners Application Form

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Membership Criteria

Please review the following membership criteria.

1. Advisors/Planners: Your company has less than five advisors/planners.
2. User Account Limit: Membership user accounts are limited to a maximum of 4 users.
3. Login Credentials: Staff will not share their login credentials with other staff.
4. Corporate Structure: Your company is not part of a larger corporate entity or umbrella firm.
5. Auto-Renewal: Membership will auto-renew on 1st June.
6. Membership Cancellation: You may cancel your membership by providing PIMFA with one month’s written notice sent to: accounts@pimfa.co.uk.
7. Membership Fees: To be paid via an online secure link using a Credit/Debit card.
8. Non-Refundable Fees: Membership fees are non-refundable.

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PIMFA Response to FCA AI Live Testing Engagement Paper

Posted on June 13, 2025July 25, 2025 by Maria Fritzsche

Progress At Last For Pensions Dashboard

Posted on June 12, 2025June 12, 2025 by Vicky Pearce

A whole seven years later, we thought it was time for an update. Just last month, the first pension provider successfully completed its connection and it is now thought the functioning dashboard will be available to the public by the end of 2026. So, what has been happening lately and what’s next on the development list?

Say goodbye to lost pensions

The concept behind the pensions dashboard is great. One central hub where everyone can keep track of the schemes they join throughout their career, making it easier to plan for the future. What’s not to like? Once all providers are connected, the dashboard will allow consumers to view basic information about any pension scheme into which they have been enrolled. This includes final salary occupational schemes, defined contribution schemes, personal pension plans and workplace pensions. When a user logs on, the system will send a query to all providers and produce a list of schemes that match the individual’s details. This will allow them to see how much they have sitting in each pension, the level of income they might receive and what they can expect from the state when they retire.

Momentum is building

In relative terms, we have seen significant progress this year in the development of the pensions dashboard. The FCA has outlined its regulated activity, which includes connecting to the Money and Pensions Service (MaPS) dashboard’s digital architecture. By interlinking the systems, it will allow the pensions dashboard to work seamlessly, providing the comprehensive overview we all desire. The regulator has also set out what it expects of the firms carrying out regulated pensions dashboard activities. This will ensure the services provided are secure, reliable and user-friendly. The MaPS ecosystem will be a crucial component of this initiative. Legal and General became the first pensions provider to connect to the dashboards programme in April, marking a significant breakthrough on the progress front. However, there are around 3,000 schemes and providers to connect in total. A big ask by October next year!

Technology available now

Current research suggests 81% of working-age adults are unsure about the location of all their pensions, contributing to an estimated £3.1 billion sitting in lost pots in the UK. Since its find and combine service launched in 2022, Raindrop has successfully retrieved £500 million in savings from nearly 45,000 lost pensions. Just last year, the platform recovered £251 million – a 61% increase on its recoveries in 2023. On average the pension pots Rainbow located last year were valued at £14,000, with the largest single pension worth £656,000. This just goes to show the potential the dashboard has to reshape the future of retirement planning and revolutionise pension saving. Raindrop’s technology can already be used as a powerful advisory tool, helping you recover and consolidate clients’ lost pensions, gain a clearer view of their financial situation and address concerns about inadequate retirement funds. In turn, this enables you to offer a more personalised and strategic service.

Transforming the planning process

There is no doubt the pensions dashboard will transform how consumers manage their retirement savings, providing a secure and comprehensive overview of all their pensions. If progress continues at the current rate, it is poised to become an essential tool for anyone looking to take control of their retirement planning. To read more about how it was originally conceived, our previous blog can be found here. If you would like to discuss integrating the pensions dashboard into your systems and processes and the compliance issues it may raise, don’t hesitate to contact us on (0161) 521 8641 or email: info@b-compliant.co.uk Vicky Pearce, Director, B-Compliant.

Focus: Constructive Advocacy