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The Digital Poverty Alliance

At SQR, we believe that inclusivity is crucial in helping everyone prove their identity easily and securely, whether online or in person, without putting their personal information at risk. But there’s a bigger issue we need to tackle to make this possible: Digital Poverty.
Charter for Digital Inclusion certificate

For those unfamiliar, digital poverty is defined as “the inability to interact with the online world fully, when, where, and how an individual needs to.” As more of our daily lives move online, from banking to healthcare to education, the cost of living crisis is making it even harder for many households to keep up. The reality is that for millions of people, affording basic digital access, like internet connectivity or essential devices, has become a significant challenge.

In fact, techUK reports that 53% of people who are offline say they simply can’t afford the monthly broadband costs, and 2.5 million people are already behind on their broadband bills. The younger generation is also feeling the impact: 26% of young people (8-25 years) don’t have access to a laptop or similar device. During the pandemic, 1 in 5 children being home-schooled didn’t have access to the right device, such as a laptop, to keep up with their education.

This issue is further exacerbated by the fact that approximately 10.2 million adults in the UK (20%) lack the basic digital skills necessary to navigate the online world, according to Lloyds Bank’s 2022 Consumer Digital Index.

This digital divide isn’t just about convenience, it’s about access to opportunity. And bridging this gap is essential for a more inclusive future.

On September 12th, our Head of Strategic Partnerships, Steven Webster had the privilege of attending the “End Digital Poverty Day Gala” hosted by the Digital Poverty Alliance. This inspiring event brought together a passionate community of individuals and organisations dedicated to closing the digital divide and creating a more inclusive future for all. It’s great to see such a wide range of businesses coming together for this amazing cause.

As a non-profit charity, the Digital Poverty Alliance, is dedicated to uniting people from across sectors, business, government, charity, and education, with one clear mission: to end digital poverty in the UK and, eventually, around the world. Their goal is to bring together various initiatives and research efforts focused on digital poverty, creating a unified national strategy to tackle this critical issue.

What really stood out at the event was the realisation that digital inclusion isn’t just a nice goal to aim for, it’s an absolute necessity if we want a fair and equitable society, and we can all work together to achieve this. We need to do whatever we can to support real, systemic change, whether that’s boosting digital literacy or making sure everyone has the connectivity they need to thrive in today’s digital world. Needless to say, SQR signed the Charter for Digital Inclusion and we are delighted to be part of a movement that aims to bring long-term change to communities affected by digital poverty.

From listening to Digital Poverty Alliance’s CEO, Elizabeth Anderson, it’s clear that digital poverty is deeply connected with overall poverty in the UK. To truly tackle poverty, we must first address digital exclusion. From accessing education and job opportunities to navigating the social security system or even securing affordable utilities, digital access is now essential for everyday life.

Yet, with every new technological advancement, the divide only widens, deepening existing inequalities related to race, gender, age, ability, and income. This growing gap is a pressing issue we can no longer afford to ignore.

The pandemic shed light on the digital divide, and while some progress has been made, it’s far from enough. Simply providing devices won’t solve the problem, we need comprehensive solutions that address all the underlying factors of digital poverty if we’re to make lasting change.

The Digital Poverty Alliance aims to eliminate digital poverty by 2030 through its National Delivery Plan, which is centred around six key missions. This plan outlines both short- and long-term actions for the government, industry, and the third sector to address digital poverty. SQR has pledged its commitment to supporting the Alliance’s mission by becoming a corporate member and encourages other organisations to join the effort by visiting its Charter for Digital Inclusion.

Steven Webster, Head of Strategic Partnerships – SQR, comments; “I was honoured to attend the End Digital Poverty Day Gala Reception on behalf of SQR. The event provided a wonderful opportunity to connect with like minded individuals and organisations, dedicated to addressing digital poverty and advancing inclusion across the UK. It was inspiring to hear from the speakers and learn more about the impactful work being done across various sectors”.

Get pledging your support and read the full Charter for Digital Inclusion here.

In this case study, we explore how digital identity verification can successfully address key challenges, demonstrating its impact in transforming public sector processes.

Solving Public Sector Pain Points: 

The need for independent validation of corporate ownership data has never been more pressing. As countries around the world intensify efforts to combat money laundering, tax evasion and financial crimes, understanding Ultimate Beneficial Ownership (UBO) has become a key global priority. Findings by the International Financial Accountability, Transparency and Integrity (FACTI Panel) estimates;

  • $500 billion losses to governments each year from profit-shifting enterprises;
  • $7 trillion in private wealth hidden in haven countries, with 10% of world GDP held offshore;
  • Money laundering of around $1.6 trillion per year, or 2.7% of global GDP.

One of the most effective tools in this battle is the beneficial ownership registry, but ensuring the accuracy and integrity of the information held within often presents a challenge. Certified digital identity solutions could provide the answer. 

What is a Beneficial Ownership Registry?

A beneficial ownership registry is a database that records the individuals who have significant control over, or who stand to benefit from, a legal entity such as a company or trust. The goal is to bring transparency to the ownership structure of companies, making it harder for criminals to hide behind complex corporate arrangements.

According to the Financial Action Task Force (FATF), the global authority on anti-money laundering and combating the financing of terrorism, a UBO is “the natural person(s) who ultimately owns or controls a customer or the natural person on whose behalf a transaction is being conducted.” This definition extends to those who exercise ultimate control over a legal entity, typically individuals who directly or indirectly own more than 25% of a company’s shares or voting rights.

The Challenges of UBO Disclosure

Identifying UBOs is not always straightforward. Ownership can be deliberately obscured through layered holding structures, spread across multiple jurisdictions with differing disclosure rules. This creates a significant challenge for authorities and regulators trying to track the real beneficiaries of a company. The International Monetary Fund (IMF) emphasised this critical risk in their 2022 whitepaper ‘A guide to Beneficial Ownership Transparency’, noting that countries should have mechanisms to ensure the accuracy of the data submitted.

FATF defines accuracy in the context of beneficial ownership information as having been “verified to confirm its accuracy by checking the identity and status of the beneficial owner using reliable, independently sourced or obtained documents, data, or information.” Given the complexities involved, independent validation of beneficial ownership data is critical. Without robust mechanisms, beneficial ownership registries run the risk of being inaccurate or incomplete, which leaves the system vulnerable to financial crime.

A Leading Example

One country that has made significant strides in beneficial ownership verification is Denmark. The Danish system integrates digital identity tools such as ‘MitID’ – a government-issued digital ID – with its beneficial ownership registry. MitID connects to an individual’s civil registration number, as well as their address in the Danish Address Register, enabling authorities to automatically cross-check all of the information submitted against trusted databases. This reduces the risk of both unintentional errors and fraud, ensuring a higher level of data accuracy.

However, while Denmark’s approach provides a model initiative in respect of the country’s resident beneficial owners, it does have limitations. Non-residents are ineligible for a MitID, necessitating an additional identity verification process for this group of beneficial owners. This adds complexity and relies on more traditional, less streamlined methods. 

Fostering an Inclusive Cross-Border Approach

Countries and jurisdictions without government-issued digital identity systems, or with foreign national UBOs, are increasingly turning to private sector digital identity solutions to validate their data. It is crucial however, that only digital identity providers certified to a recognised government standard – such as DIATF in the UK or eIDAS in the EU – are onboarded. This ensures that the verification process meets stringent regulatory and security benchmarks, providing a high level of trust and reliability. Find out how SQR’s certified digital identity solution is being leveraged in this way here.

This type of collaboration between public and private sectors fosters the creation of innovative, tailored solutions that meet the unique needs of each jurisdiction while also leveraging the advantages of reusability. For instance, individuals with a certified digital identity from an approved provider can seamlessly share their pre-verified identity information with the relevant authorities. This approach not only streamlines the verification process but also ensures adherence to stringent government standards, significantly mitigating the risk of fraud and enhancing the integrity of beneficial ownership data.

The Future of UBO Verification

Countries and jurisdictions without government-issued digital identity systems, or with foreign national UBOs, are increasingly turning to private sector digital identity solutions to validate their data. It is crucial however, that only digital identity providers certified to a recognised government standard – such as DIATF in the UK or eIDAS in the EU – are onboarded. This ensures that the verification process meets stringent regulatory and security benchmarks, providing a high level of trust and reliability. Find out how SQR’s certified digital identity solution is being leveraged in this way here.

The use of independent digital identity systems represents a crucial step forward in improving the accuracy and security of beneficial ownership databases. By fostering collaboration between governments and the private sector, countries can implement innovative, scalable solutions that address the growing demands of the global regulatory environment. Ultimately, these advances will empower authorities to better tackle financial crime, increase public trust, and enhance the integrity of beneficial ownership data worldwide.

A secure, efficient and inclusive digital identity system offers a wide range of benefits. By adopting certified digital identity solutions, governments and organisations can streamline operations, build public trust, and create a more secure and transparent digital ecosystem. 

The benefits of secure, efficient and inclusive digital identity

A certified digital identity solution provides a reliable and verifiable source of information, minimising errors often associated with manual verification processes. This is particularly crucial for company beneficial ownership data, where accuracy is paramount to ensure transparency and accountability. By verifying the legitimacy of ownership, digital identity systems ensure that only authorised individuals can access sensitive information or claim beneficial ownership. This significantly reduces fraudulent activity, protecting both individuals and organisations.

Governments around the world face stringent regulatory requirements for transparency, anti-money laundering (AML) and combating the financing of terrorism (CFT). Certified digital verification identity solutions also help meet regulatory obligations, by providing a secure and trusted method for verifying beneficial owners. Automating and standardising the identity verification process further ensures that organisations are compliant with complex regulations, whilst also reducing the risk of non-compliance penalties.

Managing large datasets manually is time-consuming and prone to errors. Thus, automating and streamlining data management and digital identity verification processes reduces administrative burdens and improves operational efficiency. This more accurate processing of ownership and identity data, in turn leads to better decision-making and resource allocation for governments and businesses. With a certified digital identity system, sensitive data related to ownership is better protected against breaches, thanks to robust encryption and authentication processes. These enhanced security measures ensure that sensitive information remains protected, and helps to maintain the integrity of ownership records.

In an increasingly interconnected world, the ability to verify identities across borders is essential for multinational organisations and cross-border transactions. Certified digital identity solutions have the ability to integrate with international databases, ensuring consistency and reliability in identity verification on a global scale. It further plays a key role in enhancing global interoperability, as they enable integration with international databases. This is crucial for verifying identities consistently across borders, supporting multinational entities and cross-border transactions.

Additionally, governments that utilise certified digital identity verification systems can strengthen public confidence by demonstrating their commitment to transparency and safeguarding ownership data integrity. Furthermore, collaboration between governments and certified identity verification service providers fosters innovation. By partnering with cybertech firms, governments leverage advanced technology to develop scalable, compliant, and secure solutions for managing beneficial ownership databases.

This synergy benefits both parties, allowing governments to implement modern solutions while enabling tech firms to design systems aligned with regulatory needs.

Rebecca Glassey, Product & Operations Manager at SQR:

“Certified digital identity solutions are the cornerstone of secure, accurate data management in the modern era. By collaborating closely with government entities, we ensure that our technology not only meets the highest regulatory standards but also delivers the scalability and security that public systems demand. It’s all about providing a seamless and trusted verification process, while reducing the risk of fraud and errors in critical government datasets like beneficial ownership registers.”

Steven Webster, Head of Strategic Partnerships at SQR:

“Our work with government agencies highlights the immense value of public-private collaboration in tackling complex challenges such as identity verification. By partnering with certified Identity Service Providers, governments can adopt cutting-edge technology that ensures transparency and security in managing beneficial ownership data. This level of cooperation fosters innovation and enables both parties to create solutions that are not only efficient but also adaptable to the evolving regulatory landscape.”

For more details on how SQR’s certified digital identity solution is being implemented in collaboration with governments, refer to this SQR article.

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