Recently, the AFM (Autoriteit Financiële Markten) published a report on the use of digital identity. In this publication, the AFM outlines the benefits and conditions surrounding the adoption of digital identity solutions in light of the upcoming implementation of the eIDAS 2.0 regulation.

Regulators in the financial industry, who are often ahead of the pack, seem to emphasize that, once all citizens possess a government-recognized and trustworthy identity app, financial institutions must adopt this solution to streamline online identification and authentication processes. In essence, financial regulators are stating that digital identity should be used unless there is a compelling reason not to.

For the financial industry most of these new rules will be enforced through sector-specific regulations, such as:

• EBA Guidelines on the use of Remote Customer Onboarding Solutions
• EU AML Package (AMLR & AMLD6)
• FATF's Position Paper on the use of digital identity (applicable globally, so the rest of the world beyond the EU)

Ultimately, it is expected that financial institutions will need to demonstrate that their verifications are based on trusted digital identities in order to comply with KYC requirements set by regulators. This presents a significant challenge as new regulations come into force.

By starting now with the implementation of identity apps, financial institutions can future-proof their verification processes. Our platform is well positioned to support this transition and enables institutions to integrate all major identity apps from across Europe and beyond.