Regulation (EU) 2024/1183 (eIDAS 2), which entered into force on 20 May 2024, introduces EU Digital Identity Wallets (EUDI Wallets), which will be digital wallets in the form of mobile apps, which will allow citizens to identify themselves, contract, sign, and digitally store and manage electronic declarations of attributes. Here we tell you the keys to the Wallet that you should know.

As regulated by Article 5f of eIDAS 2, the banking and financial sector is one of those obliged to accept the wallet as an identification method by December 2027 at the latest.

And what will this mean for banks?

Spanish Anti-Money Laundering Regulations and qualified electronic signatures

The portfolio expands the options contemplated in Article 12 of Spain’s Law 10/2010 on the prevention of money laundering and terrorist financing, so that financial institutions and other regulated entities can carry out due diligence processes to identify their customers.

According to this article, “Obliged entities may establish business relationships or carry out transactions through telephone, electronic or telematic means with customers who are not physically present, provided that any of the following circumstances occur: a) The identity of the customer is accredited by means of the qualified electronic signature regulated in Regulation (EU) No 910/2014 of the European Parliament and of the Council, of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC. In this case, it will not be necessary to obtain a copy of the document, although it will be mandatory to keep the identification data that justify the validity of the procedure. In all other cases, when the electronic signature used does not meet the requirements of a qualified electronic signature, it will continue to be mandatory to obtain a copy of the identification document within one month (…)”

The use of the qualified electronic signature exempts the need to obtain a copy of the identification document.

Although some financial institutions offer the possibility for their customers to identify themselves by using a qualified digital certificate to carry out the qualified signature, it is not the most widely used remote identification method.

One of the most used is video-identification, implemented under the Authorization of video-identification procedures issued by SEPBLAC in 2017.

Paradigm shift

Although identification with qualified electronic signatures is not currently the most common method, the arrival of the wallet may drive its adoption for two reasons.

On the one hand, identity wallets will have to allow citizens to make qualified electronic signatures free of charge. This means that the friction that existed until now to adopt qualified signature (e.g. the need for a qualified signature creation device such as a chip card or a USB token), which can be done easily and free of charge, is eliminated.

On the other hand, the wallet will be a valid identification method in itself, so if the potential customer shares their identification data of the person, they must serve the financial institution to prove the contract.

These two factors make the portfolio a key tool in the due diligence processes for European financial institutions. So much so that the European Commission, in its 2021 EUDI Wallet impact report (from when the reform of EU Regulation 910/2014 was proposed), estimated an average saving of 1.02 billion euros due to the improvement in the efficiency of CDD processes in financial services.

User centric ID from EADTrust

EADTrust is a Trust Service Provider that is helping organizations become “eIDAS & EUDI Wallet Ready Organizations”. If you want us to share with you the progress on the Digital Identity Portfolio, sign up here: Directory – User Centric Identity.