Europe’s embrace of decentralized identity means significant cost savings for business and better customer experiences
The European Union is laying the foundation for the mass digitalization of business and social life for over 450 million people with open-source specifications for a European digital identity (eIDAS 2.0) and digital identity wallet (EUDI). The identities and wallets built from these specifications and standards will, eventually, enable European citizens, businesses, and organizations to securely share and prove information about themselves in privacy-preserving ways across each of the 27 member states.
By Trevor Butterworth
What does this mean for business?
There are two dimensions to how EUDI will impact business:
Interaction with the government.
Interaction with customers (whether B2B or B2C).
Interaction with government
The scale of the EU’s digital ambitions are already driving global adoption of decentralized identity; countries want to be digitally compatible with what emerges so as to ensure frictionless interaction, whether in trade or travel.
But at the same time, many countries have already adopted similar decentralized solutions, some of which are far ahead of Europe in deployment and offer much greater functionality to users (due to more advanced decentralized identity specifications).
The best way for a company, an industry, or a sector to see what the immediate impact of EUDI will look like is to look at Canada, where the Government of British Columbia’s implementation of “digital trust” through Verifiable Credentials has reduced paperwork and increased efficiency for business.
A good starting point is login. A company with a decentralized digital identity no longer needs to use a login and password to access government services, thereby significantly reducing the company’s and the government’s exposure to identity theft and fraud while improving user experience.
Government, in turn, can issue credentials for business registration, business addresses certifications, licenses, permits — the whole range of paper-based authorization and proof — in the form of tamper-free credentials, which a company can then use and reuse whenever it needs to prove that it has the requisite documentation for a particular activity. The goal: eliminate paperwork and duplication with information that can be instantly authenticated.
With the ability to create verifiable documents comes the ability to sign these documents in the same verifiable way. For example, with a verifiable credential, a business can digitally sign an application for a license in a way that a) automatically ingests the requisite authenticated data from the credential, thereby reducing friction and manual data entry error, and b) signs the application in a legally-binding unalterable way.
The government of British Columbia has also created OrgBook as a verifiable repository of information about businesses registered in the Canadian province.
In sum, EUDI and eIDAS represent a significant opportunity to reduce the costs of compliance by creating authoritative and verifiable business data that can be seamlessly reduced. For data and regulation-intensive sectors, this represents a significant opportunity to reduce costs and make the business of setting up and running a business much more efficient.
Interaction with customers
The immediate advantage to decentralized digital identities is that you really will be able to know that your customer is your customer. By enabling people and organizations to hold their identity data, share this data securely, and have it easily, instantly, proved cryptographically, decentralized identity removes a critical security weakness in current digital authentication: the centralized database filled with personal data.
If you don’t have to store personal data to verify a digital identity, it can’t be stolen and you eliminate a security cost. It also means you can provide seamless access to a resource or service without the need for customers or users to create identity accounts with logins and passwords, a key attack vector for phishing and a key friction point for users (no more MFA). And if you no longer have to store personal data in order to make your business work, you’ve just radically simplified compliance with the numerous directives from GDPR on data minimization and privacy. You’re happy, your customers are happy — rarely is there a technology where everyone comes out as a winner.
These are the immediate benefits and the impact will be felt most in fraud reduction and better customer and user experiences. But remember, you can create Verifiable Credentials for multiple kinds of data and not just personal data. How about Verifiable Invoices to simplify invoicing and tackle invoice fraud? You could cryptographically prove in an instant that every invoice was authentic, came from a legitimate supplier, and had not been altered. A simple use case to implement, simple to use, and it solves a systemic problem.
And if you can manage invoices, you can manage payments. Remember, if you can trust the identity and the data presented from a Verifiable Credential, you can immediately act on the data. Seamless authentication and seamless payments create trust networks that eliminate the need for intermediaries and enable you to scale business in a way that current technology can not. This has significant revenue saving and creating implications.
Exciting! So what do you do now?
Enter the market by building quickly and then scale your solution when you need to. And you can do this easily and cost-effectively with Indicio Proven.
Indicio Proven is the most flexible system for implementing decentralized identity and Verifiable Credentials. We’ve made Proven eIDAS 2.0 and EUDI compatible, so you now get Europe in addition to the leading formats and protocols used by the rest of the world.
We’ve also made it easy to combine credential formats in a single digital wallet for a continuous workflow, so you can leverage Indicio Proven’s interoperability to go from anywhere to everywhere.
Why Indicio? We are masters of scale, battle tested in global deployments. With Indicio Proven you can be up and using Verifiable Credentials in hours and implement a country-level solution in a matter of days.
And because we’ve been leading the world in building award-winning, enterprise-grade decentralized identity solutions. We’ve got everything you need to go straight to building a solution for your customers instead of embarking on a long, costly learning curve to build all the components from scratch.
There’s going to be a cascade
The value props of this technology are not imaginary. Here’s what Gartner’s Market Guide from 2024 had to say
Decentralized identity for “identity verification, account takeovers, fraud, privacy and security… represents magnitudes of improvement in terms of efficiency, cost and assurance.”
At some point, incremental development and deployment turns into a cascade. The shift to an architecture of portable digital trust changes the fundamentals in how we share and consume information. Seamless authentication reduces the cost and drag of uncertainty in an information-driven economy. The question is if you don’t start now, will you be able to catch up to those who do.
Contact us now to see a demo and discuss your European digital identity strategy!
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