How to foster Innovation and Value Creation with the European Digital Identity Wallet

How the European Digital Identity Wallet will bring #innovation and create value for the citizens and businesses in Europe.

Any views expressed in this article are the personal views of the author.

The European Digital Identity Wallet

In June 2021, the European Commission issued a proposal for the implementation of the European Digital Identity Wallet and the revision of the eiDAS regulation covering the national identity schemes and trust services, with the overall objective of further expanding the availability and usage of digital identities across the industries and the EU, while complementing the identity with additional attributes and credentials, always under the sole control of the user. The Proposal is now under discussion by the Member States that are expected to reach a General Consensus by the end of the year in order to start negotiation and approval during 2023.

The overall proposal leverages the existing identity schemes in the EU under the current regulation, hence a key question from all the parties in the ecosystem is whether the proposal will bring real value and boost innovation in the European digital ecosystem or it will bring incremental innovation to the existing scenario, but with limited changes. These scenarios were discussed by a dedicated panel at the “Digital Wallet: Identity (R)evolution” event hosted by the Politecnico of Milano.

Evolving the national eIDs

For the majority of the EU countries that have started their journey into implementing a national digital identity ecosystem, the continuity from existing solutions is a prerequisite for minimizing the overall costs and capitalizing from the current achievements, also in terms of consumers and market awareness and acceptance. Nevertheless, we can expect that the EUDIW will further boost and expand the availability of digital identity to all citizens and to many vertical industries beyond the public sector. Some of these industries still use closed processes or manual procedures for customer authentication or digital onboarding.

However there are additional aspects of the overall concept of the Identity Wallet that are unique to the EUDIW and have the potential to create a Revolution in the digital arena by bringing new value and incremental opportunities for the market.

A harmonized European digital identity is the enabler for the Single Digital Market

I would start with mentioning the harmonization of the national identity schemes into one European solution, that will allow us to feel and act as European citizens whether we move for holidays, work or study across the EU. The harmonization will bring significant benefits especially to the businesses operating in Europe, these will be able to target and manage their digital consumers in the same way, whether they are Italian, French or Spanish, since they will have the opportunity to integrate one single identity instead of 27 different solutions under national regulations.

Additionally, the Wallet is expected to greatly expand the current eID ecosystems by introducing new roles and redefining the existing ones. For example, since the overall concept includes different credentials and attributes — like for example the driving license, travel credentials, health certificates prescriptions and so on- , there will be an increasing role for the issuer of the credentials, with a greater opportunity especially in the sectors with a limited readiness in terms of data digitization. The wallet provider is also a new role that- according to legislation- can be played by different players under the discretion of the Member States, not to mention the relying parties using the EUDIW services, those will have the opportunity to create new services and allow a frictionless and easy digital onboarding to new customers.

Identity and credentials together will ease the digital customer experience

While discussing the key pillars of value creation, a special role is played by the combination of identity and other credentials that, despite being stored separately in the Wallet, can be presented in one click to the same digital transaction, ensuring a completely different experience for the user and allowing new business opportunities. We can see many use cases for this: for example when renting a car both the eID and a valid driving license are needed, when traveling the eID needs to be coupled with travel credential during the check in, or when paying online for certain goods that require a minimum age by law or when a specific certification is needed to get a discount, like for example being a student to get a 20% off on books.

Control over our own data will be central from now on

However, according to the Self Sovereign Model at the base of the European Identity Wallet, only the user will have those credentials stored in his wallet. As a consequence, all value models based on data monetisation will not be possible and businesses will need to build their services starting from the consumer and the value he/she perceives when using those services. All in all, the user will have a central role in the ecosystem as well as increasing responsibility starting from the consciousness about the importance of accurately managing his/her own data since these data have real value.

An awareness that we have lost in our digital life and that will be central from now on.