Last week, UK Prime Minister Sir Keir Starmer announced a new digital identity scheme that would be mandatory in order to work in the UK. Dubbed BritCard, the new digital ID is intended to “combat illegal working while making it easier for the vast majority of people to use vital government services.” By ending the need for manual identity checks with paper-based records, the UK Government claims this will simplify applications for driving licenses, childcare and welfare, and streamline access to tax records.
Prime Minister Starmer said: “Working people are worried about the level of illegal migration into this country. A secure border and controlled migration are reasonable demands, and this government is listening and delivering. Digital ID is an enormous opportunity for the UK. It will make it tougher to work illegally in this country, making our borders more secure. And it will also offer ordinary citizens countless benefits, like being able to prove your identity to access key services swiftly – rather than hunting around for an old utility bill.”
Referencing successful examples in Australia, Estonia, Denmark and India, the UK will “listen to a range of views on how the service will be delivered, as part of a public consultation to be launched later this year.” The free digital identity app is expected to be in place before the next election in 2029. The announcement has revived a national debate about privacy, security, control and efficiency, with YouGov revealing 42% in support of Starmer's plan, while 45% opposed it. Reform voters were by far the strongest opponents of the scheme.
Fintech industry: Innovation at risk?
Commenting on the news, Janine Hirt, CEO of Innovate Finance and RegTech UK, welcomed the government’s support but warned of unintended consequences: “Reusable digital identity and verification is a critical component of the tech stack that forms the building blocks for fintech innovation in the UK – helping to reduce fraud and enable financial inclusion. The decision to mandate Government ID however risks the discussion being focused on civil liberty and sovereignty – rather than the utility and innovation this technology can bring to people across the UK.”
Hirt stressed the importance of a competitive market underpinned by a trust framework, not a monopoly or costly State solution. She added that mandating a government-issued ID could crowd out companies already developing innovative solutions accredited against the government’s own legal framework.
Jonathan Frost, director of global advisory for EMEA at BioCatch, echoed this sentiment. “Digital ID is not a silver bullet for illegal work, informal economies, or fraud. Its more immediate value may lie in reducing friction in financial services and state entitlements rather than directly cutting fraud.”
Fintech’s role in digital identity: A missed opportunity?
Fyio co-founder Sarah Wrixon pointed out that employers are already legally obliged to verify right-to-work status and that existing channels like the Employer Checking Service are in place. She argued that: “Harnessing maturing next-generation platforms developed by pioneering British tech start-ups is a logical option.”
Wrixon also raised concerns about data ownership and scope creep, warning that state-controlled apps often request unnecessary permissions and risk overreach. She advocated for secure, user-controlled apps that allow individuals to verify and share data safely and temporarily.
Who should lead digital identity?
Several industry voices and analysts have questioned whether the government should be the sole provider of digital identity infrastructure. Critics argue that: A state-led scheme risks stifling innovation and creating a single point of failure for cybersecurity.
The private sector already offers robust, interoperable solutions that align with the UK’s Digital Identity Trust Framework. Public trust in government-led tech initiatives remains low due to past failures like GOV.UK Verify and concerns over surveillance.
A crossroads for digital identity governance
The UK’s BritCard proposal marks a pivotal moment in the evolution of digital identity infrastructure. While the government’s ambition to streamline access to services and curb illegal employment is clear, industry experts caution that centralising control risks undermining innovation, competition, and public trust.
Insights from sectoral analyses and industry commentary suggest that a hybrid model, where government sets standards but private providers deliver services, may offer a more resilient and inclusive path forward. Countries like Estonia and India have demonstrated that interoperability and decentralisation can coexist with strong national frameworks, enabling both security and innovation.
Moreover, the Digital Identity Sectoral Analysis 2025 published by the UK Government itself highlights the importance of market diversity, noting that “a thriving digital identity ecosystem depends on multiple providers, user choice, and trust-enhancing mechanisms.” This aligns with calls from fintech leaders to avoid a state monopoly and instead leverage the UK’s vibrant tech sector, which has already produced GDPR-compliant, user-controlled verification platforms.
As the public consultation unfolds, the government faces a strategic choice: build a system that empowers citizens and innovators alike, or risk repeating past missteps like GOV.UK Verify, which failed to gain traction due to limited functionality and poor user experience.
Ultimately, the success of BritCard will depend not just on its technical design, but on who controls it, how it’s governed, and whether it truly serves the people it’s meant to protect.