New research has revealed that British financial firms are not keeping up with digital investment in other sectors.

While other countries are taking a lead in facial recognition, social media data and automated electronic data capture that identifies customers, banks based in the UK are stuck in the dark age, according to an identity data intelligence specialist firm called GBG.

GBG's research suggests that one-third of British banks and fintechs are ‘seriously lagging behind international competitors’ when it comes to fraud checks and 84% of financial firms are concerned about their ability to identify customers.

According to the study conducted on GBG's behalf by Forrester Research, this is just one symptom of the UK's financial sector lagging behind China, Singapore, the US and Australia in its approach to customers' identities.

The research has also revealed that British firms are less inclined to invest in new technology to deal with this and pay more attention to cost control than their global counterparts.

Mick Hegarty, the managing director of GBG, said: “Facial recognition and automated electronic document capture have been used in airports for some time now, and the iPhone X has taken facial recognition to an even more mainstream level, so it seems particularly clunky and outdated to have to visit a branch and produce a hard copy of an identity document and/or a utility bill to open up a new account.

“The likes of Amazon, Apple and Facebook have really raised the bar and everybody else needs to keep up.”

Despite the UK’s reputation as a world-leader in artificial intelligence, interest in new technology such as facial recognition, automated data capture and social media data analysis has yet to blossom there.

He did add a note of optimism, however: “Our research shows that UK fintechs are more interested than the established banks in adopting new approaches and more are planning to increase investment in the next 12 months.

“These new challenger banks will prove vital to the UK financial service sector in keeping pace with the rest of the world whilst we navigate a challenging year of legislation and policy change.”