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Future Ready: SQR’s 2025 Predictions

As we dive into 2025, the identity verification landscape is brimming with potential and transformative advancements.
Digital ID Summit presentation setup

Day to day, the team at SQR are immersed in the world of identity proving, although we appreciate not everyone is – so we thought we’d pull together our predictions for the identity world as we are steamrolling swiftly into 2025.

The Rise of Reusable Digital Identity

Reusable digital identities (reIDs) are set to become the foundation of seamless and secure online interactions. These verified credentials empower users to authenticate themselves across multiple platforms and contexts – whether online, offline, or in person. According to Liminal’s Reusable Identity Report, the global reusable identification market is projected to reach nearly $270 billion by 2027, reflecting the immense impact we’ll see on our day-to-day lives.

Currently, the identity technology market is fragmented, creating challenges for organisations and consumers alike. There will be a focus for 2025 on streamlining the adoption of reID technology, making it user-friendly while prioritising choice and privacy. Key developments we anticipate include:

  • Further standardisation of approaches to identity verification, particularly in financial services.
  • Improved user convenience and choice coupled with stronger privacy safeguards.
  • Simplified compliance processes for onboarding.

Biometrics and the Importance of Consent

Biometric authentication continues to evolve, offering new possibilities for identity verification. In 2025, we’ll see a rise in diverse and innovative ways to prove identity, particularly within finance. From fingerprints to facial recognition, linking unique physical attributes to actions is becoming a trusted standard.

However, the absolute cornerstone of biometric technology’s success is user consent. Consent isn’t just a trend for 2025; it’s a necessity. For example, the concept of “Pay by me”—a method that reduces purchasing friction, while enhancing security using biometrics – requires users to approve payments actively. This principle can extend to other areas, such as ticketing and access control. The key to doing this properly? Ensuring that users remain in control of their biometric data and its use, always. *

Regulatory Shifts in the UK, EU, and Beyond

United Kingdom
In the UK, legislative progress is accelerating the shift toward taking digital identity verification seriously. In December 2024 the UK saw movement in all these three pieces of legislation:

  • Data (Use and Access) Bill: Digital Verification Services (DVS) framework is being introduced, which aims to provide a structured regulatory foundation for digital identity verification. This framework will enable UK residents to use certified digital identities in various situations, enhancing convenience and security while allowing individuals greater control over their personal data.
  • Online Safety Act: mandates that online platforms implement stringent measures to protect users, particularly children, from harmful and illegal content, with Ofcom designated as the regulator to enforce compliance through substantial fines and potential criminal liability for senior managers of non-compliant companies.
  • Licensing Act: Starting next year, digital IDs will enable age verification for purchasing alcohol in pubs, clubs, and shops.

In November, the UK Government announced the Digital Identity and Attributes Trust Framework (DIATF) entering into the “gamma” phase in 2025, laying the groundwork for secure and inclusive digital identity solutions, though there is no indication that it is moving towards a dedicated national ID scheme, unlike the EU….

Europe
The EU’s compliance landscape is dominated by eIDAS 2.0, driving the adoption of government-issued electronic IDs. This regulatory shift underscores the growing importance of interoperable and trusted identity systems across Europe. With each country being able to provide its own ID, we’re going to need to see standards, and approvals taking centre stage. Providing challenges in 2026 and beyond, for organisations that have to prove who their customers are, and when customers are going to want to use the ID in their “digital wallet”.

Global Trends
Globally, we’re witnessing the rise of mobile driving licenses (mDLs) and we’ll start to see the need for the development of cross-border identity verification solutions. As organisations rely increasingly on digital documents, the challenge, one SQR is working on solving, lies in ensuring their authenticity and deploying the right technologies to build trust.

Looking Ahead

At SQR, we’re dedicated to offering secure, efficient, and inclusive identity verification solutions. Leveraging cutting-edge facial biometric technology, we prioritise a seamless and consent-driven user experience. As compliance requirements evolve and organisational demands increase, we’re here to help navigate the complexities of identity proving. The path forward might seem challenging for organisations, but with the right tools, it’s more manageable than ever.

For organisations and consumers alike, 2025 promises an era of innovation and opportunity in identity verification—an era where secure, efficient, inclusive identity solutions can take centre stage.

*At SQR we strive to provide our customers with identity verification solutions that incorporate state-of-the-art facial biometric technology, offering a seamless and secure user experience. We ALWAYS do this with consent from the person proving their identity.

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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