Digital identities: is your firm ready?

The legal landscape continues to evolve and the latest development in the conveyancing space pinpoints digital identity verification as the way forward. Aligning the property transaction process with other sectors such as banking not only modernises the home moving experience, but also improves processes for law firms, better protecting them and their clients. So, is your firm ready?

Following an announcement earlier this year from HM Land Registry (HMLR) outlining the introduction of a safe harbour for digital ID use in conveyancing, the matter has been a key interest for the industry. With fraud prevention in property purchases relying on reliable and accurate verification of all parties within a transaction, the current process for firms is mostly manual. Open to the risk of human error, inconsistency or simply being an arduous procedure, reasons for seeking out alternative methods of verifying ID continue to mount. Electronic verification has become increasingly attractive for law firms.

The case for adopting digital ID verification lies in three core areas; the client experience, consistent and accurate technology, and modernising the home moving process.

Property transactions for the modern mover

There have been discussions for several years of how the property sector can modernise the home moving process, bringing it in closer alignment with other sectors. Naturally, the roll-on effect of reforming a process to meet 21st century expectations will result in better client experiences.

Client experiences are shaped from the very first interaction within the home moving process, which is why firms must focus on engaging with their clients by a means that reflects the experience they receive in other sectors. Quite often, this involves technology that ensures ease of use and a streamlined, digital experience. It’s what clients have come to expect.

HMLR’s acceptance of electronically signed witnessed deeds from July 2020 set in motion a shift toward digital from government bodies. Paving the way for a more digitally-driven home moving process, this was the first step in what is sure to evolve how the property transaction process plays out in years to come.

Less than a year after the electronic signature announcement, HMLR unveiled the plans for a Digital Identity Standard designed to provide a safe harbour for law firms. A welcome arrival amid a raft of public health measures that limited social contact, firms were provided an initiative that would instil more confidence when completing identity checks digitally. Launching the Digital Identity Standard has facilitated a way to continue the evolution of digital home moving, with the eventual shift away from witnessed e-signatures, replacing them with qualified signatures.

Technology blueprints and secure digital identities

There has been some hesitation toward digital identity verification and e-signatures. It’s understandable, most new technologies are initially met with hesitancy, usually left for the trailblazers and early adopters to test. However, the evidence already available supports the power of digital ID verification.

The greatest barrier for law firms to adopt digital identities has been a gap in the solutions available on the market. That’s quickly changing. The Digital Identity Standard has set out a clear blueprint for technology providers to develop a range of secure digital ID solutions. Ensuring that biometric or cryptographic requirements are met provides multi-layered technology checks to validate ID verification and provide a robust due diligence check that assures firms they meet the requirements.

Using a combination of biometric data to confirm a person’s ID digitally, verification involves features such as liveness and encrypted chips, such as those used on passports, to complete a digital ID check accurately, reliably, and securely. It’s bank-grade technology used by leading institutions including Monzo, Nationwide, Barclays, and more. Extending use of digital IDs to property transactions is a logical progression.

Qualified signatures and electronic onboarding

Uptake of digital IDs lends itself to further expansion in the use of accepted electronic signatures, known as qualified electronic signatures (QES). When a signer’s identity is verified by a “qualified trust service provider”, it replaces the assurance that is often provided by a witness. To achieve this, providers will need to meet a strict set of standards, which are aligned with digital identity verification.

When firms onboard their clients electronically, they set up an exceptional customer experience from the outset. With the ability to verify their identity from anywhere using their ID documents and smartphone, the accessibility of digital onboarding makes it an asset for both firms and clients alike.

As the future of property transactions moves towards qualified electronic signatures, electronic onboarding establishes the client’s digital ID from the initial instruction, making the use of QES easier, more secure, and ultimately more user-friendly. It also assures firms they are compliant with their due diligence requirements.

There are few steps in the conveyancing process that are yet to be fully digitised, however it’s clear the path has been set out to achieve the vision. Electronic onboarding and digital identities are already here, are you embracing them yet?