UK Digital Identity Guidance under the Money Laundering Regulations

UK Digital Identity Guidance under the Money Laundering Regulations

On 26 February 2026, HM Treasury published guidance on how digital identities can be used to meet identity verification requirements under the UK Money Laundering Regulations (MLRs).

Why This Matters

Identity verification sits at the core of customer due diligence under the MLRs. As onboarding becomes increasingly digital, firms have been seeking clarity on whether government-recognised digital identity solutions can be relied upon without increasing regulatory risk.

This guidance provides that clarity. It confirms that certain certified digital identity services can satisfy the identity verification requirements in Regulation 28. For firms investing in digital onboarding, automation and remote verification, this reduces legal uncertainty and supports innovation.

However, it does not reduce supervisory expectations. Firms remain fully responsible for risk assessment, assurance decisions and overall AML compliance.

This article looks at:

• What the guidance formally clarifies
• How Digital Verification Services fit within Regulation 28
• Where ambiguity remains for MLROs and compliance teams
• What firms should be doing now

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