2020 proved to be a year of tech innovation. With the very nature of communication and commerce suddenly upended by a global health crisis, solutions needed to be reached and fast.
Working remotely quickly went from a temporary necessity to a ‘new normal’ in many parts of the business world.
This change particularly resonated in mortgage application processing and property transfers, because in order for these transactions to go through, the accurate identities of all parties needed to be verified.
This process wasn’t exactly simple before the Covid-19 pandemic, but an inability for conveyancers to meet with clients in person has only exacerbated proceedings.
Coronavirus restrictions factor considerably in the amount of failed housing transactions last year.
Failed deals rose 37% over the course of 2020, and 46% since 2019. Clearly this is an issue that needs to be addressed.
To that end, HM Land Registry (HMLR) has stepped up to the plate, recently unveiling its new Digital Identity Standards. If followed by conveyancers, these guidelines stand to streamline and enhance the veracity of housing transactions for all involved.
HMLR recognises there’s more than one problem that needs to be solved here — overall quality of experience and effectiveness in halting fraud.
This is being accomplished with forward-thinking digital solutions which tap into modern products already widely available.
Along the way, HMLR is also looking to strengthen the conversation between conveyancers and technology providers to continue refining techniques and implementation.
The new standards look to currently-accessible mobile devices that most citizens are already using.
In the traditional ID verification process, self-taken photos, or ‘selfies’ were used and had to be compared to an image that the agency already had on file. A human being had to be employed to compare these photos, along with other identifying information, to make the call as to whether or not the documentation matched.
The process was slow, complicated, and left plenty of room for both fraudulent behaviour and regular human error.
The new guidelines, however, require high quality photos or even live video to be compared, via facial recognition algorithms, in real time to profile images cryptographically embedded into a biometric passport.
The entire system is based around one lifted from the UK’s Digital ID Trust Framework — indicating that the standards are well informed and that HMLR hopes they will become the industry norm.
Control over documentation
The HMLR’s new digital standard also lends a solution to another serious problem facing all home buyers, who are currently stuck with a system that forces them to duplicate key Know your Customer (KYC) and Anti-Money Laundering (AML) processes right through the home buying chain.
That means multiple copies of sensitive personal documents (such as photo IDs, utility bills and bank statements) are presented and stored with multiple service providers. This increases the likelihood of a data breach which can lead to identity fraud.
Instead, home buyers can own and control their documentation, linked to their digital ID enabling them to share these on a read-only, time-restricted basis between specified parties in the home-buying process, reducing unnecessary responsibility and cost for services providers to have to store and protect this information at all times.
Accountability
Once a company has set up such a system based on HMLR’s guidelines, their conveyance process will save time and money, leaving customers more satisfied, and providing confidence that no bad actors have slipped the net.
In fact, HMLR has offered any firm that adheres to their outline a form of “safe harbour.” This essentially means that, as long as the conveyancer can show compliance, they won’t be held accountable should fraud occur.
This will undoubtedly help bolster adoption, ease pressure on those in charge of these departments and reduce costs.
Transition
Of course, being a brand new endeavour, not every relevant company will be prepared to upgrade immediately. HMLR understands that these changes take time, and has made it clear that for the foreseeable future, all traditional forms of ID verification will still be perfectly acceptable.
Nonetheless, the numerous benefits this upgrade offers are clear and a more permanent shift to the new standards is coming — but appropriate planning and execution are essential first.
Importantly, there is now a viable path for businesses to not only overcome challenges posed by Covid-19, but truly overhaul a process that was in dire need of it already. Leveraging modern technology seems to be the key to bringing this system to life, and HMLR is doing exactly that.
Before long, customers and conveyancers alike will be enjoying smoother, faster and safer property transfers, and with these new standards in hand, that reality shouldn’t be too far off.
Alastair Johnson is Founder and CEO of Nuggets, a decentralised, self-sovereign identity and payment platform.
