Identity verification (IDV) is the process of confirming that a person is who they claim to be.

Firms use identity verification to prevent fraud, comply with regulations such as Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements, and safely onboard customers.

With a growing number of critical transactions occurring online, the risks of fraud and financial crime have risen dramatically. 

In 2025, according to the Office for National Statistics, there were an estimated 4.1 million fraud incidents in England and Wales – a 14% increase year-on-year. This alarming trend highlights the need for secure and reliable IDV solutions to protect both businesses and consumers. 

As a result, regulatory bodies such as the Financial Conduct Authority (FCA), Companies House, and HM Land Registry have tightened their compliance requirements, ensuring that businesses implement effective identity checks.

As identity verification requirements continue to evolve, it’s important to understand both the regulatory landscape and the technologies that help businesses stay compliant.

In this guide, you’ll learn:

• • What identity verification is
  • What digital identity verification means
  • How identity verification works
  • Why Companies House identity verification is required
  • How HM Land Registry Safe Harbour fits into digital ID checks
  • What the best identity verification methods are for regulated firms

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Part 1: What is identity verification?

Identity verification relies on a combination of identity documents, biometric checks and trusted data sources to establish confidence that an individual is who they claim to be. The UK Digital Identity and Attributes Trust Framework sets out the standards organisations should follow when carrying out these checks.

Important to note: IDV (proving an individual’s identity) is not the same as login authorisation (which might include passwords, usernames, and two-factor authentication). 

Why is identity verification important?

Identity verification is important because it helps firms:

• • Prevent fraud and impersonation
  • Meet KYC and AML obligations
  • Comply with FCA, Companies House and Land Registry requirements
  • Protect customers and clients
  • Reduce operational risk and manual errors
  • Create trust in digital transactions

Types of Identity Verification Services

There are several types of IDV services businesses can use, such as:

• • Digital/Online IDV, which is fast, secure, and scalable, and often integrated via APIs.
  • Manual/In-Person IDV is less common due to risks of inefficiency, but is still used in some high-risk cases.
  • Hybrid Approaches that combine digital tools with human oversight for enhanced accuracy.

What challenges are posed by IDV?

Despite advances in identity verification technology, the process still has its challenges, including:

• • The potential for false positives and negatives which necessitates improved algorithmic training
  • User friction within onboarding, which can be solved through UX-focused design
  • Privacy concerns, which call for transparent data handling and control mechanisms

Many of these challenges have driven the development of digital identity verification solutions that make the process faster, more secure and easier for users.

What is KYC identity verification?

KYC (Know Your Customer) identity verification is the process regulated businesses use to identify and verify customers before providing services.

Identity verification is one part of KYC. A full KYC process may also include:

• • Customer Due Diligence (CDD)
  • Risk assessments
  • Source of funds checks
  • PEP and sanctions screening
  • Ongoing monitoring

What is digital identity verification? 

Digital identity verification is the process of verifying someone’s identity remotely using technology rather than face-to-face checks.

A typical digital ID verification journey includes:

• • Uploading a passport or driving licence
  • Capturing a selfie
  • Facial matching and liveness detection
  • Database and sanctions checks
  • Generating an audit trail

Digital IDV is faster, more scalable and often more secure than manual verification because it can detect fraudulent documents and impersonation attempts.

How does digital identity verification work?

Digital IDV typically follows the process listed below. However, you may find that certain elements happen in a different order, not at all, or require that more steps be involved. 

• • Collect identity documents: The user uploads a passport, driving licence or other approved ID.
  • Verify document authenticity: Technology checks security features and detects tampering.
  • Capture a biometric selfie: The user takes a live photo or video.
  • Perform liveness detection: The system confirms a real person is present.
  • Run database checks: PEP, sanctions and other risk checks are completed.
  • Make a verification decision: The identity is approved, rejected or referred for review.
  • Store an audit trail: Evidence is retained for compliance purposes.

The technology behind secure IDV

Modern IDV solutions use a range of advanced technologies to enhance their security, such as artificial intelligence, machine learning, and advanced algorithms that can identify fraudulent documents and biometric spoofing. Encryption and secure data storage protocols ensure data privacy and integrity.

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Part 2: Navigating UK Government compliance

Companies House and HM Land Registry are two government entities in the UK where identity verification is now mandatory. Companies House oversees company registrations, while the Land Registry manages property ownership records. Both have introduced stringent IDV requirements to combat fraud and meet evolving legal frameworks, such as the Economic Crime and Corporate Transparency Act 2023.

Companies House identity verification requirements

Companies House is the UK’s registrar of companies. It manages company formations, annual filings, and director information.

Companies House identity verification is a legal requirement that was introduced under the Economic Crime and Corporate Transparency Act 2023.

It is designed to confirm that directors, People with Significant Control (PSCs) and other individuals filing information with Companies House are genuine people and not fraudulent identities.

Companies House now requires IDV for:

• • Registering a new company
  • Filing sensitive documents
  • Verifying directors and PSCs

These requirements can create challenges, including navigating online verification processes and ensuring documents meet the necessary standards.

How do you verify your identity for Companies House?

Individuals can verify their identity through:

• • An Authorised Corporate Service Provider (ACSP)
  • A third-party digital identity verification provider
  • Directly with Companies House via GOV.UK One Login

The verification process typically involves:

• • Uploading a government-issued ID
  • Completing a biometric check (such as taking a selfie)
  • Receiving confirmation if your identity has been verified 

What are the benefits of using a third-party IDV service for Companies House?

Using a third-party identity verification service for Companies House has clear benefits, including:

• • Efficiency and speed, especially for high-volume filings
  • Accuracy and reduced human errors through AI-driven verification
  • Assurance that you are complying with all statutory ID requirements
  • Reducing the burden of admin to free up internal resources

Failure to verify identities correctly can lead to fines, delayed filings, and potential criminal liability for fraudulent submissions. Ensuring proper IDV is both a legal and operational necessity. For example, this often-complicated process is made simpler with the Armalytix Identity Service, allowing for turnaround times of 15 minutes end-to-end by breaking the Companies House IDV process into four simple steps:

1. 1. Upload government-issued ID
   2. Capture a live selfie for biometric comparison
   3. Automatic cross-checks against PEPs/sanctions lists
   4. Secure submission to Companies House

What is the Land Registry and its Safe Harbour provision?

HM Land Registry records property ownership and ensures the security of land titles. The “Safe Harbour” provision, introduced in 2021, offers legal protection to conveyancers who follow specific IDV requirements.

This provision is used to prevent fraud in property transactions, where identity theft can lead to catastrophic financial losses.

How does identity verification align with Safe Harbour requirements?

Land Registry requires:

• • Photo ID and proof of address
  • Face-to-face or equivalent digital IDV
  • A secure audit trail

What is the identity verification workflow for Land Registry purposes?

Using an eIDV service, such as the Armalytix Identity Service, for Land Registry IDV is a simple process:

• • The client receives a digital ID link
  • They complete ID and biometric verification remotely
  • The verification report is generated and stored
  • A full report can be shared with solicitors and the Land Registry

This process integrates smoothly with legal practice management systems.

What are the advantages of partnering with a specialist IDV provider for Land Registry?

The benefits of partnering with a specialist identity verification provider for Land Registry include:

• • Mitigating the legal risk of not complying with Safe Harbour requirements
  • Ensuring alignment with the latest Land Registry guidance
  • Enhancing the client’s confidence in a secure digital process

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Part 3: The Future of Identity Verification

Several key trends are shaping the future of IDV, including:

• • Decentralised Identity (SSI), which allows users to control their identity credentials
  • AI enhancements within fraud detection
  • Regulatory evolution, including ongoing updates to UK and global IDV standards

These developments are shaping the next generation of identity verification, driving demand for solutions that combine regulatory compliance, advanced fraud prevention, and a seamless user experience. 

The Armalytix Identity Service has been built with these evolving requirements in mind.

What is the Armalytix Identity Service, and how does it work?

Continuing our track record as market leaders in precision client information, we’re using cutting-edge technology to deliver an ID service designed to meet the specific needs of professionals.

Our flexible ID service contains all the components needed to meet the variety of regulatory standards you face, through a combination of biometric checks, document verification, and encrypted data storage.

We give you the following features, configurable to your needs. Take whatever you want:

• • Global Digital ID verification 
  • NFC Verification
  • Facial Recognition
  • Liveness detection
  • Proof of Address database verification
  • Proof of Address document matching
  • Mortality register
  • Relevant peps, sanctions, and adverse media screening
  • Ongoing monitoring for as long as you need it
  • Decision Audit trail
  • In-person UK customer support
  • Use our web portal, integrate to your existing systems via our API or order from your existing service providers

All of this is completely configurable depending on what you’re dealing with — Land Registry Safe Harbour, Companies House ID and more. Clients can use desktop or mobile to complete the journey, and our renowned customer team will support them every step of the way.

Secure identity verification is a critical foundation for trust within digital interactions. Whether you’re working within law or accountancy, the Armalytix Identity Service offers a fast, compliant, and secure solution.

Ready to transform your compliance journey? Contact us today to see the Armalytix Identity Service in action.

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Frequently asked questions: 

1. What is identity verification?

Identity verification is the process of confirming that a person is who they claim to be using documents, biometrics and trusted data sources.

2. What is electronic identity verification?

Electronic identity verification (eIDV) is another term commonly used for digital identity verification. It uses digital technology to verify identity.

3. What is digital identity verification?

Digital identity verification is the remote verification of identity using documents, biometrics and data checks.

4. What is Companies House identity verification?

It is the process of verifying directors, PSCs and other individuals connected to UK companies.

5. How do you verify your identity for Companies House?

You can usually verify through GOV.UK One Login, an ACSP, or a third-party digital identity provider.

6. What is KYC identity verification?

It is the identity-checking component of a broader Know Your Customer compliance process.

7. Why is identity verification important?

It helps prevent fraud, meet regulatory requirements and build trust in digital transactions.

8. What are the best identity verification methods?

The strongest methods combine document verification, biometrics and liveness detection.