Europe’s new Digital Identity wallet offers inhabitants and companies a digital ID they can rely on, it acts as a tool which not only verifies and stores ID data but also enhances the application of the data for ease of use. The European Digital Identity will be held in a mobile phone wallet. This would make it easier to communicate important information in a timely and user-friendly manner at the discretion of the individual.
Why is the EU Digital ID Wallet relevant today?
The EU Digital Identity Wallet is a European Commission Project chaired by Ursula Von der Leyen that aims to create a uniform digital identifying system in Europe.
This EU Digital ID Wallet will allow European individuals to keep their papers and personal information in an app in a secure manner (also known as a wallet). These papers and information include medical records, bank cards, and even university degree titles, in addition to residents’ identity documents and driving licenses. This information will be used to build a worldwide EU Digital Identity for each person, which they will be able to use across all member states.
As a result, the EU’s digital identity wallet will streamline the way individuals are identified in all aspects of their life in any EU nation, making all types of processes and daily lives much easier and simpler. Digital ID wallets are growing all over the country with independent apps and verification systems, a centralised solution with a more secure approach can help build digital trust among the people.
How is Europe’s Digital ID Wallet affecting the rest of the world?
The worldwide pandemic of covid-19 has increased the digitization of procedures for both businesses and public agencies all around the world. Private enterprises, particularly those in the financial sector, have been obliged to relocate their services online in order to avoid losing consumers and business possibilities as a result of pandemic-related limitations that prevented them from using or offering their services on-site. As a result, creating a secure digital identification method has become critical.
This is only one example of how a robust and secure digital identity may be utilised in accordance with European rules such as eIDAS and AML.
This EU digital ID wallet will enable individuals to enroll in a European institution, apply for a scholarship, purchase pharmaceuticals, and engage in any other official activity that requires identity verification in any of the EU’s 27 member nations.
This not only affects Europeans, but also the world on how it sees digital ID. Often thought of as a distrustful way of collecting people’s information, digital ID wallets with AI and ML can remove any bias that people are unconsciously more prone to, apart from the increased ease of digital transactions, signups and various other applications now simplified, digital ID wallets also holds the key to our future, enabling newer systems and technologies to be integrated into government processes, eCommerce, healthcare and more.
The key benefits of a Digital ID wallet as visualised by the European Commission are:
- Offering a simple and safe way to control information shared with services online
- Operating on digital wallets unrestricted on mobile phone apps
- Allowing cross-border authentication with an e-Identity system
- Confirming individual personal attributes for access to public and private digital services
- Enhancing document tracking for greater accountability
- Reduce fraud caused by phishing and identity theft
Although such a system will take time to be set up and noticed throughout the world, it will soon be undeniable the advantages it provides over the traditional methods of verification and Identity Management.
What is the value proposition of the EU Digital ID wallet for banks and financial institutions?
The digitalization of services is critical for all EU banks, and it has been heightened by the COVID-19 epidemic. Adoption of the EU digital ID wallet will hasten bank digitization by providing greater flexibility and convenience to clients, will have a good environmental impact and will result in cost savings:
Banks will use the European Digital Identity Wallet for customer onboarding
Relying on the wallet to conduct AML and KYC due diligence on their customers. This should help address the increasing threat of identity theft and cybercrime, but it will also save banks money, as the KYC process is rather costly. Customer experience is improved since the form may be prefilled with all of the certified properties provided by the wallet.
Applying for a bank loan using the European Digital Identity Wallet
Applying for a bank loan normally entails a number of stages, from scheduling appointments and holding actual meetings to collecting and signing all paper paperwork – and redoing the procedure if any documents are missing.
The user just needs to pick the appropriate papers that are kept locally in his digital wallet to respond to the bank’s request while utilising the European Digital Identity. Then, verified digital papers are generated and securely transmitted to the bank, which may then proceed with the application procedure.
Strong Customer Authentication Using the European Digital Identity Wallet (SCA)
SCA can be facilitated by using a Digital Identity Wallet in everyday financial activities and payments. Of course, in the event of online payment, the wallet must be compatible with the 3DSecure protocol and scheme rules. That includes PSD2 SCA standards (dynamic code related to the transaction, presentation of the transaction context, etc.) and 3DSecure-specific procedures aimed at reducing friction in the user experience, particularly in the app. to app. flow (automatic redirection between merchant app. and authentication app.). Furthermore, clarity on the accountability for fraud in the event that PSD2 SCA is delegated to the wallet is still expected.
How IDcentral helps in Digital ID verification and Digital Onboarding
IDcentral provides Identity Verification and Document Verification that can verify the presence and IDs of real people who can then access services without friction. This process also ensures AML CTF compliance and Sanction Screening of the individuals being onboarded.
Learn more about IDcentral’s AI based Digital ID Verification Solution
Sumanth Kumar is a Marketing Associate at IDcentral (A Subex Company). With hands-on experience with all of IDcentral’s KYC and Onboarding Technology, he loves to create indispensable digital content about the trends in User Onboarding across multiple industries.