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Across Europe, a new digital chapter is taking place. It begins with a simple promise: proving your identity online shouldn’t feel like an obstacle course! EU Digital Identity (EUDI) Regulation—the EU’s updated framework for trusted electronic identification—sets new, unified rules so citizens and businesses can authenticate securely across all Member States.
For years, Europeans have juggled passwords, paper scans, and clunky verification steps. At the heart of this shift is the EU Digital Identity Wallet, a government‑issued app that lets people store and share official documents (ID cards, licenses, certificates, ...) and sign electronically with a single, trusted tool: just one secure wallet recognised across Europe. EUDI is the rulebook; the EU Digital Identity Wallet (EUDIW) is the tool. The regulation sets the standards and obligations, while the wallet is the practical app citizens and businesses will use every day.
When digital identity will be deployed, maintaining paper-based and manual processes looks like you’ve stopped trying. Trust is built on security, and reputation on experience, and organizations that won’t be offering a fully digital experience simply look outdated.
Vanessa Müller
EY Luxembourg Partner, Banking and Capital Market
But what is digital identity?
Digital identity, under eIDAS, refers to a legally recognized electronic identification (eID) that allows individuals or organizations to prove who they are, online across the EU, using secure and interoperable systems. This information is stored in an online wallet (EUDIW) that will include, for example, identity documents, driver’s licenses, biometric data, age attributes, and payment credentials.
A rulebook guided by two main principles.
- User control & privacy: Individuals remain fully in control of their personal data; deciding what to share, with whom, and for which purpose.
- Interoperability: Digital identities and trust services issued in one Member State are seamlessly recognised across the EU, enabling truly cross‑border digital interactions.
Since January 2026, the EU has been running 6 major pilot projects to test the Digital Identity Wallet. Payments and banking are among the most important areas being explored. How? Via account opening: verify your identity and open an account using your wallet as one single, trusted method of identification, and online transactions: with one click, users can share only the data needed to approve a payment while instantly confirming age or nationality.
It is the promise to replace today’s complex online identity and authorization checks for a future where proving who you are feels as effortless as unlocking your phone, backed by stronger security and truly seamless digital experiences.
Clément Robert
Senior Manager, Regulatory Compliance
Financial players, go from short to long term in 1 click
With the EUDIW, this process could shrink from days to minutes, thanks to instant identity validation and automated data flows. Data collection becomes safer and easier with certified, standardised attributes provided directly by the wallet. For financial institutions, this isn’t just a technical update. It’s a chance to redesign the customer experience, remove friction, save time, and step into a truly digital era for cross-border services.
For banks, the shift is major. Faster onboarding lowers operational costs. Verified identity data strengthens KYC, while automated capture reduces errors and fraud risks. For AML teams, accurate, government‑issued data means faster screening, fewer false positives and more focus on real risks.
And once identity is secure, reusable and portable, banks can unlock new digital services, from remote onboarding to instant credit scoring, powered by trusted data from the very first interaction.
The transition is already underway. The question is whether your organisation is ready to lead it.
End of 2026: Member States shall provide at least one EUDIW to all their EU citizens.
End of 2027: Private‑sector service providers, such as banks and other financial institutions operating in areas where Strong Customer Authentication is required, must accept the EUDIW upon user request.
With mandatory acceptance coming as early as next year, financial institutions must accelerate their digital identity strategy—if they haven’t already—from defining clear business priorities to upgrading efficient processes, operating models and compliance frameworks to avoid being left with processes that feel stuck in past.
Summary
Across Europe, a new digital chapter is taking place. It begins with a simple promise: proving your identity online shouldn’t feel like an obstacle course! EU Digital Identity (EUDI) Regulation—the EU’s updated framework for trusted electronic identification—sets new, unified rules so citizens and businesses can authenticate securely across all Member States.
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