What the February 2026 update means for your Anti‑Money Laundering (AML) processes

By Sarah Croft | March 10, 2026 | Customer News, KYC/AML, Online identity checks

Clarity for regulated firms and a stronger role for certified digital identity services

The UK government has released new guidance that changes how regulated firms can use digital identity to meet their obligations under the Money Laundering Regulations (MLRs). Published on 26th February 2026 by the Department for Science, Innovation and Technology (DSIT), the update explains how the UK Digital Identity and Attributes Trust Framework works alongside the Money Laundering, Terrorist Financing and Transfer of Funds Regulations.

For the accountants, legal professionals and other regulated organisations we support, this clarity is significant. With supervisory bodies increasing their focus on AML controls, the guidance provides long‑awaited certainty and a clear, compliant route to safer and more efficient onboarding.

Clearer direction on digital identity and AML compliance

The guidance confirms three points that directly matter to regulated firms:

• Digital identity checks can be used to meet identity verification requirements under Regulation 28 of the MLRs.
• Only DIATF‑certified Digital Verification Services – those assessed against the UK Digital Identity and Attributes Trust Framework – meet the standard referenced in the guidance.
• Firms remain responsible for their AML obligations, including risk assessments, ongoing monitoring, enhanced due diligence and record‑keeping.

This removes the ambiguity that has held some firms back from adopting digital identity. It also raises the bar: firms must ensure that any digital identity provider they use is certified and listed on the government’s DVS Register.

What is digital identity and why does it matters for AML?

A digital identity check allows an individual to prove who they are without physically presenting identity documents. With the person’s consent, it can securely share verified information such as name, address and biometric data (e.g., a face scan).

Certified Digital Verification Service providers such as TrustID verify this information using authoritative evidence – often the same documents used in manual AML checks, such as passports or driving licences. Individuals typically complete their digital identity check through a smartphone or computer, and TrustID uses a combination of leading technology and human experts to verify their identity evidence.

For regulated firms, this means identity verification can be completed remotely, consistently and with stronger protection against forged or altered documents.

What is the UK Digital Identity and Attributes Trust Framework?

First developed in 2020, the UK Digital Identity and Attributes Trust Framework (DIATF) sets the standards that digital identity providers must meet. It covers:

• identity verification standards
• privacy and security requirements
• operational processes for digital identity providers

The framework is technology‑agnostic: it does not prescribe specific tools but instead defines the outcomes providers must achieve. Providers can be independently assessed against these standards, and those that meet the requirements become certified. Certified services may then appear on the government’s Digital Verification Services (DVS) Register, maintained by the Office for Digital Identities and Attributes (OfDIA).

Being listed on the register signals that a service meets recognised government standards for digital identity verification and can reliably be used for identity verification in compliance with the MLRs.

How digital identity fits into the Money Laundering Regulations

Under the MLRs, regulated organisations must take steps to prevent money laundering and terrorist financing. A core part of this is Customer Due Diligence (CDD), including verifying a customer’s identity.

The February 2026 guidance confirms that:

• Certified digital identity services can be used as a reliable and independent source of identity information.
• Digital identity can support identity checks for individuals and company directors.
• Digital identity strengthens AML processes but does not replace wider due diligence obligations.

Firms must still assess customer risk, understand the purpose of the business relationship and apply enhanced checks where appropriate. Working with a certified DVS improves the identity verification component of CDD but does not remove the need for professional judgement.

What the DVS guidance update means for accountants and legal professionals

Customers across accountancy and legal practices tell us they share similar AML challenges: high onboarding volumes, exposure to identity fraud and increasing scrutiny from supervisory bodies such as ICAEW, ACCA, HMRC, the SRA and the CLC. The February 2026 guidance gives both sectors a clearer, safer path to digital identity adoption.

Stronger protection against identity fraud

Certified digital identity checks reduce the risk of accepting forged or altered documents. Our identity trends blog highlights the ever‑changing fraud risks and emerging challenges that are increasingly difficult to manage with manual processes alone.

Faster, more consistent onboarding

Digital identity removes the need for manual document handling and face‑to‑face checks. This helps firms:

• reduce administrative burden
• improve accuracy and consistency
• deliver a smoother client experience

For practices with seasonal peaks or tight turnaround times, this is a meaningful efficiency gain.

A clearer, regulator‑aligned approach

Supervisory bodies increasingly expect firms to adopt technology that strengthens AML controls. The guidance gives accountants and legal professionals a method for:

• verifying clients remotely
• reducing impersonation risk
• demonstrating a robust, risk‑based approach
• maintaining a clear audit trail

A better fit for modern workflows

Whether onboarding a new company director, a property buyer, a beneficiary or a tax client, digital identity checks now sit comfortably within the expectations of both AML best practice and the MLRs — provided they come from a certified DVS.

How TrustID supports firms under the new guidance

TrustID is a certified Digital Verification Service under the UK Digital Identity and Attributes Trust Framework. This certification provides assurance that identity verification using TrustID meets the standards referenced by HM Treasury and DSIT and gives our customers:

• a defensible position during supervisory reviews
• reduced risk of non‑compliance
• confidence that identity checks meet government expectations

Alongside certification, we support firms in applying the guidance in practice, from mapping digital checks into existing CDD workflows to updating AML policies and sharing audit‑ready results documentation.

What firms should do now:

The February 2026 guidance gives regulated firms a clear direction of travel. To align with it, accountants and legal practices should:

• review AML policies to incorporate certified digital identity checks
• update risk assessments to reflect the use of a DVS
• ensure any digital identity provider used is DIATF‑certified
• train staff on how digital identity fits into CDD obligations

TrustID helps regulated firms adopt digital identity in a way that is compliant, efficient and aligned with both AML expectations and the Money Laundering Regulations.

If you’d like to explore how digital identity could strengthen your onboarding and compliance processes, our team would be happy to talk.