Why should our bank or credit union pay attention now?
Fewer forged IDs at account opening, and less customer data to protect.
A state-endorsed digital identity is something your systems verify, not a photo your staff has to inspect.
By the numbers
Identity is where the fraud starts.
$212B
in suspicious activity tied to identity in a single year of Bank Secrecy Act reports.
FinCEN analysis of 2021 filings, January 2024
$3.5B
reported lost to impostor scams in 2025, including nearly $1 billion to business impersonators, led by bank impersonators.
Federal Trade Commission, June 2026
739
data compromises at financial services firms in 2025, more than any other sector.
Identity Theft Resource Center, January 2026
September 2026
What's new
Federal staff confirmed that government-issued digital credentials can count toward customer identification.
FinCEN and staff of the Federal Reserve, FDIC, NCUA, and OCC published answers to frequently asked questions on customer identification programs. They say an unexpired, government-issued verifiable digital credential can serve as documentary verification when it meets four conditions.
The four conditions
It shows the customer's nationality or residence.
It bears a photograph or a similar safeguard.
Your institution can extract the data from it.
Your customer identification program allows it.
What it means for SEDI
A state-endorsed digital identity is built to carry a state-verified name, birth date, photo, and in-state address. Whether a particular state's credential qualifies depends on that state's final rules, and the FAQs do not change existing requirements.
The problems this solves
Fraud
AI
Where it fits
Six places a state-endorsed digital identity fits.
Opening accounts online
Check the state's signature on a verified name, birth date, photo, and address instead of reviewing a photo of a card and a selfie.
02
Account recovery
Replace quiz questions built on breached data with the customer's state-signed ID, which a cloned voice or a stolen password cannot produce.
03
High-risk changes
Before a new payee, a large wire, or a new phone number, ask the customer to confirm it is really them.
04
Lending applications
Verify identity and in-state address at application without collecting and storing copies of documents.
05
At the branch, even offline
Check a credential at the teller line with no connection required, and without handling the customer's phone.
06
Caregivers and guardians
Accept a guardian presenting on a customer's behalf, while authority over the account still follows your usual rules.
From the 2025 SEDI Summit
“[Why] can't I ask the DMV or the State Department to vouch for me?”
Jeremy Grant
Coordinator, Better Identity Coalition
Apply
Today
The applicant types in personal details that may already be circulating from past breaches.
With a digital ID
The applicant shares a verified name, birth date, photo, and address from their wallet, with their consent.
Prove identity
Today
Staff or software reviews a photo of a license and a selfie, which forgeries and deepfakes are built to beat.
With a digital ID
Your system checks the state's digital signature instead of judging a picture.
Screen and record
Today
Copies of ID images are stored, adding to what could be exposed in a breach.
With a digital ID
You record the credential details your program requires and verify the Social Security number through your usual source.
Keep the account safe
Today
Resets rely on quiz questions and one-time codes that can be phished.
With a digital ID
When it matters, the customer presents again, and the state is never told where it was used.
Step by step
An online account opening, step by step.
If you accept it
What comes with accepting it.
Ask only for what you need
Age or address, not the whole credential.
Say what you keep, and get an OK
What you collect, why, and for how long.
Use it for that purpose only
Anything else needs the customer's express OK.
Never take the phone
Customers never hand over their device.
Accept guardians
Account authority still follows your usual rules.
Never use it against the customer
The duty of loyalty bars uses that harm or exploit the customer.
FAQ
Questions banks and credit unions ask
Government benefits
How SEDI helps programs serve people and prevent fraud
Help shape the rules
Ways for states, organizations, and individuals to take part.