Something tells us this isn’t your first hunt for digital identity verification software.
You’ve tested platforms, attended webinars, maybe even signed contracts. And practically every solution you touched created three additional problems for each one it supposedly fixed.
We know because we’ve been in those same meetings where vendors promise integration that doesn’t exist and automation that requires manual workarounds.
In this guide, we’re cutting through the noise. You’ll learn how to properly evaluate digital identity verification tools, get a no-nonsense checklist to compare vendors, and discover a platform that genuinely meets every criterion without the usual compromises.
Key Points for Busy Professionals
Digital identity verification solutions vary dramatically in how they handle integration, automation, and audit trail generation. The wrong choice creates compliance gaps even when you’re technically “doing the checks.”
Here’s what separates effective solutions from checkbox compliance tools:
- Workflow integration means verification triggers automatically at client onboarding rather than requiring manual data transfer between systems
- Electronic verification should be completed in under 60 seconds by checking government databases and credit reference agencies simultaneously
- Audit trails must timestamp every action automatically because HMRC supervision requires proof of your compliance journey, not just document copies
- Risk assessment capabilities should include HMRC-aligned templates for different client types rather than generic questionnaires that don’t reflect accountancy sector risks
- The checklist later in this article shows exactly which features to compare when evaluating vendors
Understanding What Digital ID Verification Should Do
Digital identity verification gets treated as a compliance checkbox when it should function as the foundation of your entire Customer Due Diligence process.
What IDV Actually Means
Identity verification confirms that the person or entity you’re onboarding matches the identity documents they’ve provided. This involves three distinct components working together.
- Document Verification – Checks that passports, driving licences, or identity cards are genuine and haven’t been tampered with. Electronic verification systems read the machine-readable zone on these documents and compare data against authoritative independent sources.
- Database Verification – Confirms identity details against government records, credit reference agencies, and official registries like Companies House for corporate clients. This cross-referencing ensures the person exists in legitimate public records.
- Biometric Verification – Matches the photograph on identity documents to live images or selfies provided by the client. This prevents someone using stolen or borrowed documents by confirming the person presenting the ID is actually the document holder.
Most accounting firms only need the first two components. Biometric verification becomes relevant for Enhanced Due Diligence situations involving high-risk clients.
The Compliance Standards You Must Meet
The Money Laundering Regulations 2017 require you to verify client identity before establishing a business relationship. “Before” means before you provide any regulated services, not weeks into the engagement.
MLR 2017 regulation 28 specifies that verification must use documents, data, or information from reliable and independent sources. A passport photocopy satisfies the document requirement but doesn’t prove you verified it against independent sources.
Your verification process must also screen clients against sanctions lists and PEP databases. Politically exposed persons are individuals holding prominent public functions where corruption risks are elevated.
The regulations require five years of comprehensive records showing not just what documents you collected but what you verified, when you verified it, and what results you obtained. This is why audit trail automation matters more than most firms realise.
Need the full compliance picture?
Digital identity verification is just one piece of your AML obligations. Our comprehensive guide covers Customer Due Diligence requirements, risk assessment frameworks, and record-keeping rules that accountants must follow in 2025.
Read: 2025 Guide to AML & Identity Verification Rules for Accountants →
7 Criteria for Choosing the Right Digital Identity Verification Solution
Effective digital identity verification solutions share specific characteristics that separate them from systems that technically work but create operational headaches.
Integration with Your Existing Workflow
Integration determines whether verification happens automatically or requires manual intervention every time you onboard a client.
Standalone verification tools sit outside your practice management system. You win a new client in your CRM, send them an engagement letter, then manually log into a separate verification platform to start compliance checks. This creates a gap where clients begin receiving services before verification completes.
Integrated solutions trigger verification automatically when clients accept engagement letters. The moment they sign, their information flows to the compliance module without anyone needing to remember to initiate checks manually.
Look for platforms that connect directly to your CRM through native integrations. HubSpot integration means won deals import automatically to your compliance dashboard with all client data already populated.
Verification Speed & Database Coverage
Verification speed affects both client experience and your team’s efficiency. Manual verification takes 30 to 45 minutes per client when you’re checking documents, searching sanctions lists, and recording results across multiple systems.
Electronic verification through automated systems should be completed in under 60 seconds. The system reads document data, queries government databases, checks credit reference agencies, and screens sanctions lists simultaneously.
Database coverage matters as much as speed. Your solution should access Companies House for corporate clients, verifying incorporation details and checking the Person with Significant Control (PSC) register automatically. The PSC register identifies persons with significant control, which is essential for beneficial owner verification.
Ask vendors which specific databases their system queries. “Government databases” is too vague. You need to know whether they’re checking DVLA records, passport databases, electoral registers, and credit files.
Automated Audit Trail Generation
HMRC supervision visits focus heavily on your ability to prove compliance, not just demonstrate that you collected documents. A passport copy in your filing cabinet shows you received a passport, but doesn’t prove you verified it against any database.
Manual audit trails fail because they depend on someone remembering to document every action they take. When verification happens across multiple systems, audit trail gaps are inevitable.
Automated audit trail generation timestamps every action without manual logging. Document uploads get timestamped. Verification checks get timestamped. Risk assessments get timestamped. Senior management approvals get timestamped.
The system should generate compliance certificates automatically showing exactly what was verified, which databases were checked, what results were obtained, and when each action occurred. This satisfies MLR 2017 record-keeping requirements that demand five years of comprehensive records.
Did you know?
ICAS recently reviewed UK accounting firms and found 55% had higher actual risk levels than they declared. 88% with cash-based clients failed to identify this risk factor, while 100% with overseas clients missed these critical risks entirely.
Risk Assessment Capabilities
Generic risk questionnaires don’t reflect the specific risks facing UK accounting practices. You need risk assessment templates aligned with HMRC guidance for the accountancy sector.
Templates should exist for different client types because property portfolios carry different risks than trading businesses or trust administration. High-net-worth individuals require different risk assessment questions than standard SME clients.
The system should calculate overall risk ratings based on your responses and flag automatically when Enhanced Due Diligence triggers apply. EDD situations include clients from high-risk third countries, complex ownership structures, or unusual transaction patterns.
Reusable templates matter more than most firms realise. Client circumstances change over time. When that happens, you complete a fresh risk assessment to determine whether your due diligence level remains appropriate.
Sanctions & PEP Screening
Every client verification must screen against PEP lists, financial sanctions lists, and adverse media databases. This isn’t optional under MLR 2017.
Sanctions lists update constantly as governments add or remove individuals and entities. Your verification solution should pull current data with every check rather than relying on manually updated databases that might be weeks out of date.
The system should check multiple lists simultaneously, including HM Treasury financial sanctions, UN sanctions, EU sanctions, and OFAC lists. PEP screening should cover both domestic and foreign politically exposed persons.
When the system identifies potential matches, it should alert you for manual review rather than automatically blocking the client. Not every John Smith flagged in sanctions screening is the sanctioned John Smith. Your decision and reasoning should get recorded automatically in the audit trail.
Senior Management Approval Workflows
Enhanced Due Diligence situations require senior management approval before establishing or continuing the business relationship. This requirement under MLR 2017 regulation 33 isn’t optional.
Manual approval processes fail when people forget to escalate or when approval requests sit unanswered in email inboxes. The system should route high-risk cases automatically to designated senior managers when verification results or risk assessments indicate EDD triggers.
Senior managers need a complete context visible in one place. Verification results, risk assessments, submitted documents, and any flags or concerns should all appear in the approval request.
Every approval must be timestamped and recorded with the approving manager’s identity. You need to prove not just that approval occurred but who approved it, when they approved it, and what information they reviewed.
Ongoing Monitoring & Re-verification
Client verification isn’t a one-time event. MLR 2017 requires ongoing monitoring proportionate to the risk level you’ve assigned.
Document expiry tracking matters because passports and identity cards expire. Your system should flag when client documents are approaching expiry dates so you can request updated copies before they lapse.
Client circumstances change. Someone might become a PEP after your initial verification. A standard-risk client might expand into high-risk jurisdictions. The system should support re-verification workflows when client circumstances change materially.
Ongoing sanctions screening catches clients who get added to watchlists after your initial checks. Periodic screening frequency depends on client risk level, but your system should make it easy to run fresh checks without starting the entire verification process from scratch.
Cut Through the Marketing Noise
Understanding these criteria helps, but comparing actual software against them takes hours of vendor calls and demo requests. Most marketing materials claim every feature regardless of actual capabilities. Use the checklist below to compare solutions systematically or see how FigsFlow implements each criterion in practice.
How to Compare Digital Identity Verification Solutions: A Simple Checklist
Use this comparison framework when evaluating different verification platforms. Put a tick in each box where the solution meets the requirement fully.
Solutions that tick fewer than eight boxes will create manual work even when they technically complete verifications. You’ll spend time transferring data between systems, manually logging actions, and chasing approvals.
Introducing FigsFlow: Best ID Verification Platform that Ticks the Checklist & Beyond
FigsFlow is practice management software built specifically for UK accounting firms with AML compliance integrated throughout the workflow rather than bolted on afterward.
Here’s what FigsFlow offers for digital identity verification:
- Automatic Verification Triggers – Verification starts the moment clients sign engagement letters through the e-signature system, no manual initiation required.
- Sub-30-Second Electronic Checks – Connects directly to government databases and credit reference agencies, with results and compliance certificates generated instantly.
- Integrated Sanctions Screening – Runs simultaneous checks against PEP lists, financial sanctions lists, and adverse media databases.
- Companies House Integration – Verifies incorporation details and checks the PSC register automatically for corporate clients.
- Automated Audit Trails – Every verification action, document upload, and approval creates timestamped records without manual logging.
- HMRC-Aligned Risk Assessment Templates – Customised templates for property portfolios, trusts, trading businesses, HNWIs, and cross-border clients.
- Smart Approval Routing – High-risk cases automatically route to designated senior managers with complete verification context visible in one place.
- Document Expiry Tracking – Alerts you before client documents expire so you can request renewals proactively.
FigsFlow doesn’t just verify identities. It transforms how your firm manages compliance from first contact through ongoing client relationships.
FigsFlow goes far beyond digital identity verification
FigsFlow offers everything from client proposals and engagement letters to pricing calculators, document collection portals, team collaboration tools, and payment integrations:
- Generate compliant proposals and engagement letters in 30 seconds
- Collect CDD documents securely through client portals without email back-and-forth
- Integrate seamlessly with Xero, QuickBooks, and Stripe for an end-to-end workflow
- Manage team collaboration with internal notes, task assignments, and approval workflows
- Track document expiry and automate renewal reminders for ongoing compliance, and more.
Additional Resources
- Verify Identity Through ACSP: Identity Verification Through ACSP Is Now a Business Essential
- Directors’ Identity Verification Engagement Letter Templates: Identity Verification Engagement Letter Templates – Accountants
- ID Verification in AML with FigsFlow: ID Verification & AML: 2025 Guide | FigsFlow
- Common ID Verification Mistakes: Common ID Verification Mistakes in AML | FigsFlow
- Guide to Write an AML Policy for Your Firm: Writing an AML Policy: Full Guide 2025| FigsFlow
Conclusion
The right digital identity verification solution integrates verification into your workflow so compliance happens automatically, rather than creating another system to manage.
Solutions that require manual data transfer, separate logins, or manual audit trail documentation will create compliance gaps even when they technically complete verifications. The gap between client acceptance and verification creates risk.
Evaluate platforms based on the criteria in this guide rather than vendor claims about being “compliant” or “easy to use.”
Use the comparison checklist to assess which solutions actually eliminate manual work instead of just shifting it around.
See integrated verification in action
Frequently Asked Questions
Electronic verification through automated systems takes approximately 30 seconds compared to manual processes requiring 30 to 45 minutes per client. The system checks government databases, credit reference agencies, and sanctions lists simultaneously.
UK residents can use biometric residence permits, national identity cards, or birth certificates combined with recent utility bills or bank statements. Electronic verification systems check these against credit reference agencies and electoral registers.
Digital systems read identity documents using optical character recognition, then verify details against government databases and credit reference agencies while screening sanctions lists simultaneously. Results return in approximately 30 seconds with compliance certificates.
Customer Due Diligence is standard verification for all clients. Enhanced Due Diligence adds senior management approval, source of funds verification, and more frequent monitoring for high-risk situations like PEPs or clients from high-risk countries.
Yes, but corporate verification requires additional checks, including Companies House incorporation details and beneficial owner identification through the PSC register. Your system should automate these checks rather than requiring manual lookups.
