New client? ID card please

A regulatory impact assessment published this week said there was nothing in the ID card bill to require financial organisations to make use of the scheme, and that the bill expressly prohibits any organisation from making the cards an exclusive way to prove identity.

But the assessment warned that it was only a matter of time before organisations decide it would be 'appropriate' to begin investing in electronic readers - at £250 to £750 a time - to ensure their clients are who they say they are.

'The only government regulation which might encourage earlier take-up would be any move to amend the money laundering regulations to make checking of an ID card a more explicit requirement. There are no plans for such an amendment,' it said.

Financial institutions are expected to use the new plastic in the same way that many require the production of passports as the preferred method of identification, with many firms keeping photocopies to prove the check.

ID cards were the centre piece of last week's Queen's Speech and are enthusiastically supported by Home Secretary David Blunkett as a way of combating illegal immigration.