Industry group Tisa is piloting a digital ID for financial services consumers.
The project has been in the pipeline for several months but Tisa said at its annual conference today (November 20) it was moving into its pilot phase.
The pilot will test the ID during three processes: opening a current account, taking out an Isa and setting up a pension.
The idea behind the digital ID is that consumers will have a single, portable key for their bank, insurance, investments and savings.
Justin Pearson, product innovation manager at Zurich and a member of the project's steering committee, said: "Establishing a person's identity has traditionally been achieved using passports, driving licences and in-person checks together with a range of supporting digital services.
"Moving from a hybrid paper based to a full digital solution would mean consumers benefit from quicker account opening and transfers, enhanced online security and a more competitive market."
The project is being supported by Fidelity, FNZ, HSBC, Experian and Zurich.
The findings from the pilot will feed into the prototype phase, which will start in January 2019.
Tisa is also cooperating with the government on developing the scheme and it has invited other firms to take part in this next stage.
The body created a council focussed on moving towards a digital future last year. This came after a study by PriceWaterhouseCoopers had found many wealth management firms were "surprisingly complacent" when it came to adapting to digital changes.
Harry Weber-Brown, digital innovation director at Tisa, said: "This is a hugely exciting project that will deliver real benefits to consumers. No such digital identity scheme exists in the private sector.
"Our pilot has delivered real insights into this complex challenge that we are now feeding into the prototype development."