Towards European electronic identity: A blueprint for a secure pan-European digital identity

Eric Wagner, Matteo Mannino and Oliver Lauer
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Eric Wagner: Group Product Owner Compliance Advanced Analytics, Erste Group Bank AG, Austria
Matteo Mannino: Senior Policy Adviser, Digital Finance and Innovation at a ESBG (European Savings and Retail Banking Group), Belgium
Oliver Lauer: Consultant for FinTech and Digital Identity, DSGV (Deutsche Sparkassen- und Giroverband), Germany

Journal of Financial Compliance, 2021, vol. 5, issue 2, 162-188

Abstract: As cross-border digital services are expected to grow, a secure electronic identification will be a cornerstone of the digital economy. Besides some existing solutions at the member states level, the European Union (EU) is still struggling to reach a harmonised, comprehensive approach towards digital identification. The combination of a fragmented regulatory framework and an incoherent infrastructure has created a barrier to successful emergence of industry-led use cases. The European digital identity wallet (DIW) proposal announced by the European Commission on 3rd June, 2021, sets the bar high for an extension of the electronic IDentification, Authentication and trust Services (eIDAS) framework that might generate interoperable solutions. The substance of the actual solutions adopted by the members states, however, will much depend on the negotiations in the coming months between the private sector, member states and EU co-legislators. This paper develops a blueprint for a European digital identity in the financial services sector, which should provide sufficient security against identity thefts while protecting against synthetic identities. To this aim, a clear definition of standards is needed to provide portability, interoperability and sufficient data protection and privacy. The paper offers a comprehensive overview of both the necessary requirements and the major components for the design of a future pan-European e-ID (EUid), including know your customer attributes and their respective levels of assurance (LoAs). Furthermore, it outlines the prerequisites for designing authentication. The EUid solution should be founded on a robust trust framework, based on attributes provided and directly verifiable by their respective trusted issuers. The conclusions examine the potential role of the banking sector. Although EU regulators see the private sector as well placed to act as an identity provider for private individuals and legal entities, this alone would not guarantee a high LoA. Could banks think of a successful EUid business model, considering the rising number of national KYC utilities for corporates? A possible solution would be minimising costs via the creation of a common pan-European identity infrastructure centred around a public–private partnership, including actors from different industries.

Keywords: EUid; pan-European e-ID; digital identity; wallet; secure infrastructure; authentication; KYC (search for similar items in EconPapers)
JEL-codes: E5 G2 K2 (search for similar items in EconPapers)
Date: 2021
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