EU banks & the Digital Identity opportunity

New rules in Europe next year will compel banks to accept digital identity wallets that must be issued at state level or by trusted providers. Banks will also be able to issue these wallets under government approval but can't just volunteer a wallet. The EU, through its eIDAS2 programme, had directed that all European countries should offer at least one form of digital identity to their citizens by 2026, built to a common specification. It seems that at least some of these countries will offer this through their banks, or through national mobile wallet platforms that have been developed with bank collaborations, such as Spain's Bizum, developed by Spanish banks which allows payments to a phone number connected to a bank account. A report from MobeyForum notes that while Nordic countries already have national digital ID systems, many other countries don't, creating an opportunity for banks. But it won't be straightforward. "While EUDIW will bring direct benefits such as lower operational costs in onboarding and authentication, its true impact is much more profound. The report emphasises that building a 'traditional' business case for EUDIW (European Union Digital Identity Wallet) is challenging. Instead, its business value will emerge over time through increased availability of high-assurance digital attestations, enabling new ecosystems for trust-based services and innovative mechanisms in areas like KYC, AML, contracts, and regulatory compliance." While many websites offer logins through existing portals such as Facebook or Google, the EU is looking to diverge from Big Tech, both through digital IDs and through new schemes such as Bizum, and eventually Wero which will connect all of the national wallets – and do an end run around Visa and Mastercard.