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How harmonising Europe’s digital identity landscape will transform our daily lives

​Digitisation is sweeping across Europe. COVID-19 accelerated this digital trend, prompting renewed focus on how best to provide citizens with easy, secure access to digitised identity information required for government and private services.

Digital ID is becoming inextricably linked to how we identify ourselves, and European member states, citizens and politicians are now intensely aware how important it is to be able to use digital identities across the European Union.

The increase in consumer demand for easy-to-use, fast mobile solutions – enabling fully digital consumer journeys, end-to-end – further underscores the need for an open digital ecosystem built on strong pillars of modularity and interoperability. But the impact of digitisation runs even deeper, requiring harmonisation across the entire European continent, writes Roland Eichenauer, VP & Head of Business Development, eSecurity & Digitisation at Nets Group. 

​eIDAS and the birth of European digital identity services


The European Union (EU) first introduced its Electronic Identification, Authentication and Trust Services (eIDAS) regulation in 2014, designed to increase trust in digital services and provide a framework for authenticating digital identities. It focused on digital identification, whereas a new update (eIDAS 2.0) will be centred on digital identity, which is an entirely different thing.


EU member states have continued to take individual approaches to digital identity over the last fifteen years, resulting in a fragmented landscape for digital identity solutions. According to the European Commission, "the development of divergent national solutions creates fragmentation and deprives people and businesses from the benefits of the Single Market, as they cannot use secure, convenient and uniform identification systems across the Union to access both public and private services."  


Many countries, particularly the Nordics, are increasingly enabling government-backed digital ID for their citizens as part of digital-first societies. Denmark, for example, was able to provide seamless access to important services during the pandemic thanks to its well-established national eID scheme. Yet, some member states are not actively developing digital identities at all, despite research from McKinsey Global Institute finding that countries implementing digital ID could "unlock value equivalent to 3 to 13 percent of GDP by 2030." 

 

The past few years have accelerated demand for remote identification capabilities related to a wide and growing range of activities, including applying for government services, opening an online bank account, ecommerce activities, renting an automobile, booking travel, obtaining insurance and much more. eIDAS 2.0 aims to support these growing digital identity use cases.


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​Author/source: {attribution}

Roland is an international sales and business development professional within the Financial industry with a track of +20 years of experience across Europe. In his current position at Nets he is leading the Business Development team for Digital Identity, Value Added, and Trusted Services - offering outstanding Digital Identity solutions and Value Added Services for remote digital onboarding by Identification, Authorising, Authentication, and Signing in European territories.

​eIDAS 2.0 and the arrival of EU Digital Identity Wallet

 The upcoming revision of the European eIDAS regulation will allow the European Commission to advance its goal of harmonising Europe's digital identity landscape, removing virtual borders, boosting digital connectivity, and improving access to online goods and services. International commerce could receive a massive boost and harmonisation of the market for digital identity will play a key role in establishing trust and security.


eIDAS 2.0 proposes that every European citizen receive an EU Digital Identity Wallet, issued by a qualified issuer, for safe storage and easy access of credentials, statements and personal verified data. Think of it as a 'digital twin' for all your hard-copy identity documents. This digital wallet has the potential to provide a framework to solve many of the privacy, security, and user experience problems we currently encounter in our daily lives.


EU Digital Identity Wallet will provide the secure digital storage of sensitive, personally identifiable information, such as a birth or medical certificate, a driver's licence, a passport, a bank statement, etc. This will provide EU citizens with a uniform facility in which they can manage their digital identities, boosting trust, security, and convenience across sectors.


Specifically, the European Digital Identity will:

    1. Be available to any EU citizen, resident, and business who wants to use it
    2. Be widely useable as a way either to identify users or to prove certain personal attributes, for the purpose of access to public and private digital services across the Union 

​Why is digital identity useful?

The EU Digital Identity Wallet will support multiple use cases that collectively amount to easy and secure storage of citizens' digital ID documents and makes sharing this information with companies and institutions much more convenient. Importantly, it will harmonise the use of digital identities across Europe. Whether obtaining a driving license, filling a medical prescription, or proving education or work qualifications, the wallet will allow citizens to prove their identity online, access services, share digital documents, or verify a personal attribute, such as age, without unnecessarily revealing other personal details.


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EU Digital Identity Wallets can facilitate the digitisation of all sectors and be used for many purposes, such as:

  • Banking and financial services: Open a bank account, apply for a loan, access your online banking account, or complete a KYC check from anywhere and from any device (KYC = Know Your Customer. Read on to learn more about its intersection with eID)

  • Education: Apply to any university within the EU by simply sharing your information and academic records via your digital wallet

  • Public services: Request your criminal record, apply for a residence permit, and file your tax returns in no time

  • Health: Store your Digital COVID Certificate, medical prescriptions, and health certificates in your EU digital wallet

  • Other private services: Rent a car, sign up with a mobile service provider, or pick up a package from the post office by confirming your identity via the api
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Usefully, the benefits of such a facility also extend beyond the individual citizen. Banks, financial institutions and other businesses need to meet essential Know Your Customer (KYC) security obligations, requiring user identity verification that can often require inconvenient visits to physical branch offices. This is time-consuming, costly, and restricts the process to office hours. 'Remote KYC' solutions have been launched over recent years in an attempt to remove these limitations, but they have yet to offer what customers really want: a fully digital and automated process. 

An EU Digital Identity Wallet can enable banks and other organisations to streamline their KYC processes and improve their customer onboarding experience by allowing EU customers to prove their address and identity quickly and easily, using relevant documents housed securely in the wallet. 

The EU Digital Identity Wallet will also create new business opportunities for companies operating within the EU. Companies that enable access to online services and products via the wallet stand to significantly increase their customer base. All EU nationals, regardless of where they live, will become potential customers for them. The same goes for business-to-business (B2B) companies.

Moreover, legal entities and individuals alike will be able to use the wallet to sign documents online and confirm their identity in the context of KYC checks. Certain businesses, including financial services providers, telecom companies, and popular online platforms, will be mandated to accept user authentication via these wallets.

​Granting greater consumer ownership of data

Digital identification technology has the potential to enable seamless access to public, private and cross-border digital services. It is natural, however, that some consumers will be wary. Clear emphasis should be placed on the privacy and security benefits that sit at the core of the EU Digital Identity Wallet, which puts users in full control of their digital identity and data. This empowers them to choose what data they share and who they share it with. 


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This fits in well with the growing trend towards self-sovereign identity (SSI), where an individual or business has sole ownership over the ability to control their accounts and personal data. SSI benefits consumers by protecting their privacy but also protects the economy at large by significantly reducing fraud risk and user friction. 

Interest is growing in how digital identity wallets can be used to protect consumers' broader stores of personal data. 63% of EU citizens indicated they want a secure single digital ID for all online services, giving them control over the use of their data. And this solution is coming fast, with the EU looking to establish a common toolbox as soon as September 2022, including technical architecture, standards and guidelines for best practices. In contrast to the eIDAS 1.0 regulation, where eID schemes are voluntary, it will become mandatory for member states to provide an EU Digital Identity Wallet to their citizens free of charge. 

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Shaping a digital future for all EU citizens

An EU Digital Identity Wallet will create massive growth opportunities for public and private services across European borders. We are proud to be part of two Consortiums (EWC and NOBID), designed to help to provide citizens with compelling, useful and secure digital identity tools that they have full control over.

To get there, it is critical to establish harmonisation between private and public sectors. Both parties must work as a team in order to realise the full benefits. Ultimately, citizens will start asking for an EU Digital Identity Wallet, demanding it from their own government in order to take advantage of its security and convenience in their daily lives. The potential benefits for everyone are huge and the time to go digital is now.

Frictionless customer onboarding with digital identity is already in demand from both banks and consumers, thanks to the fast, user-friendly, and secure journey it enables for customers.

Several Wallet Consortiums aim to bring digital identity to life, making it a reality for millions of users across Europe. As public and private sectors – and consumers – increasingly understand the advantages of an interoperable, unified and digital identification system, that enables them to securely share personal information in a range of scenarios nationally and cross-border. It's exciting to imagine the simpler, safer identity world being created for all EU citizens. 


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