A New Passport for the Digital Economy
Imagine a future where your smartphone serves as a universally recognized passport, allowing you to cross borders, open bank accounts, or sign financial contracts anywhere in Europe. That future is fast approaching under Europe’s eIDAS 2.0 regulation and the European Digital Identity Wallet (EUDI Wallet) initiative.
In recent months, the topic has been floating across LinkedIn, X, and YouTube, gathering millions of impressions from policy analysts, digital bankers, and privacy advocates alike. What makes it so viral is its dual nature: the promise of frictionless identity verification paired with deep questions around sovereignty, privacy, and control.
For the BFSI ecosystem, eIDAS 2.0 is more than a regulation; it’s an identity infrastructure overhaul. It redefines how banks, fintechs, and regulators will authenticate trust in a borderless digital market.
The Foundation of the European Digital Identity Wallet
The original eIDAS (910/2014) regulation enabled mutual recognition of national eIDs and trust services across the EU. However, adoption was fragmented and inconsistent, with limited participation from the private sector.
The revised eIDAS 2.0, now in effect, introduces the European Digital Identity Wallet, a secure, mobile-based digital identity tool that empowers users to manage, store, and share verified credentials such as their ID, driver’s license, or bank details.
Unlike legacy systems, the EUDI Wallet operates on the principle of user control and selective disclosure. Citizens can choose which attributes to share, proving they’re over 18 without revealing their date of birth, or validating their address without disclosing full personal data. This architecture marks a fundamental shift from centralized identity verification to decentralized, verifiable credentials built on cryptographic trust.
By 2026, all EU Member States must provide at least one wallet implementation, and by 2027, private sectors such as banking, telecom, and payments must support wallet-based identification and login. This timeline effectively transforms identity management into a core digital infrastructure layer for Europe’s financial system.
Why Now? The Market Logic Behind Digital Identity Wallets
The timing for Europe’s wallet revolution is not accidental. Three converging forces have made this moment inevitable.
First, consumer fatigue with repetitive KYC and onboarding processes has reached its peak. From opening accounts to applying for loans, customers are tired of uploading the same documents across multiple platforms.
Second, the rise of identity fraud has alarmed both regulators and institutions. According to Thales Group, weak or reused identity credentials account for a growing share of digital fraud losses in financial services.
Third, and most importantly, the EU is using regulation as infrastructure. By embedding wallets into law, not just policy, Brussels is laying the foundation for a unified identity market that aligns trust, compliance, and data portability.
For banks and fintechs, this is a double-edged sword; it challenges traditional KYC control but offers a chance to simplify onboarding, reduce fraud, and unlock new trust-based business models.
The Vendor Ecosystem: Who’s Powering Europe’s Digital Identity Wallets
Although many wallet projects are still in pilot, several BFSI technology vendors are already shaping the ecosystem. Their work provides the scaffolding for how trust, credentials, and compliance will interact under eIDAS 2.0.
1. Thales Group: The Hardware Root of Trust
Thales, a leader in digital security, is at the heart of Europe’s wallet infrastructure. Through its Digital ID Wallet solution, the company enables citizens to manage and share verified credentials securely.
Thales contributes to EU pilots such as Potential and NOBID, testing wallet functionality for payments and government services. The firm’s deep legacy in secure elements, HSMs, and cryptographic modules ensures wallet credentials are protected from tampering and spoofing.
Its proven track record in national ID, e-passport, and biometric systems, across France, Estonia, and the Nordics, positions Thales as one of the few vendors capable of delivering hardware-anchored digital identity at scale.
2. Signicat: The Bridge Between Banks and Wallets
Nordic-based Signicat has become the de facto connective tissue between digital identity and financial institutions. As a Qualified Trust Service Provider (QTSP), Signicat delivers secure electronic signatures, trust validation, and login orchestration compliant with eIDAS standards.
Its platform already integrates more than 35 national eID schemes and offers EUDI Wallet APIs to help banks and fintechs accept wallet-based authentication. The company is actively involved in several EU pilot programs and provides SDKs for wallet acceptance, making it a vital vendor for banks preparing for the 2027 deadline.
3. IDnow: Reusable Identity for Onboarding
German identity verification player IDnow is developing an IDnow Wallet designed for the reuse of verified identity data. Customers can verify themselves once and reuse that credential to open accounts, apply for loans, or sign contracts, cutting KYC costs dramatically.
The wallet supports legally binding electronic signatures and integrates with video-based verification for fallback scenarios. This combination of automation and legal assurance positions IDnow as an agile participant in the eIDAS 2.0 landscape.
4. Fenergo: Orchestrating Compliance in the Wallet Era
While Fenergo doesn’t issue credentials, it sits at the operational heart of banking identity management through its Client Lifecycle Management (CLM) platform.
As wallets become new identity sources, Fenergo’s orchestration capabilities will be essential for integrating verified credentials into compliance workflows. Its technology already automates KYC, AML, and regulatory data gathering across 120+ jurisdictions. When identity wallets go mainstream, Fenergo can plug them directly into customer onboarding and due diligence processes, turning eIDAS compliance into a competitive advantage.
5. Giesecke + Devrient (G+D): Securing Credentials for Governments and Banks
Munich-based G+D, a long-time supplier of secure identity systems and smart cards, is also positioning itself for wallet infrastructure. Its Trusted Identity Services portfolio spans mobile ID, secure credential issuance, and digital certificates, all foundational to wallet issuance.
With decades of experience in e-passport programs and payment card personalization, G+D offers the trusted credentialing backbone that governments and financial institutions will need as the wallet ecosystem scales.
From Compliance to Competitive Edge: The BFSI Opportunity
The potential for the BFSI industry goes far beyond regulatory alignment. The eIDAS 2.0 wallet model redefines customer interaction, security, and data monetization.
Frictionless KYC and Onboarding
Banks could replace repetitive document uploads with instant wallet-based credential sharing. Verified personal data, such as name, address, and age, can be cryptographically verified without storing sensitive information.
Vendors such as Thales and Signicat ensure banks can verify those credentials securely, while Fenergo manages compliance orchestration. IDnow’s wallet reuse further streamlines the experience for repeat customers, reducing abandonment rates and KYC overhead.
Secure Authentication and Login
The EUDI Wallet can serve as a passwordless login for financial apps. Instead of usernames and OTP SMS, customers authenticate using their wallet credentials, simplifying UX while meeting strong customer authentication (SCA) standards under PSD2.
Signicat’s authentication APIs and Thales’ cryptographic modules can help banks transition from legacy authentication to wallet-based identity assurance.
Legally Binding Signatures and Transaction Authorization
Under eIDAS 2.0, qualified trust providers can enable remote qualified electronic signatures (QES) directly through wallets. That means mortgage approvals, loan disbursements, or corporate contracts could be signed securely within seconds.
Thales and Signicat, both QTSP-certified, are already delivering QES capabilities. Meanwhile, IDnow integrates signature workflows into its wallet, merging verification and consent into a single, compliant user action.
Cross-Border Banking Simplified
A Spanish customer could open a bank account in Germany using their Spanish EUDI Wallet credentials, eliminating redundant identity checks. Vendors like G+D and Signicat can bridge identity validation across borders, while Fenergo adapts jurisdiction-specific compliance logic in the background.
This shift could catalyze the single banking market, where trust follows the customer rather than the institution.
Regulatory and Trust Guardrails of eIDAS 2.0
As identity wallets touch the core of personal sovereignty, trust architecture is paramount. The European Commission’s implementing acts provide strict rules on certification, security, and interoperability.
Wallet providers must undergo independent audits, conform to the Architecture and Reference Framework (ARF), and implement breach-notification protocols for cross-border incidents. Data minimization and explicit user consent are legally mandated, ensuring compliance with both eIDAS 2.0 and GDPR.
Furthermore, wallets must support revocation, credential lifecycle management, and cross-jurisdiction interoperability, meaning a French wallet must seamlessly function in Estonia or Ireland.
Vendors already accredited as QTSPs, like Thales and Signicat, have a head start. Their established compliance frameworks can shorten banks’ transition timelines and reduce audit complexity.
Global Ripples: Can Europe Export Its Wallet Model?
The EU’s identity wallet is attracting attention well beyond its borders. Policymakers in Singapore, Australia, Canada, and even India are studying the EUDI architecture as they evolve their own digital ID frameworks.
While many nations have centralized identity systems, few have attempted a user-centric, wallet-based model backed by regulation. If the European rollout proves scalable and secure, eIDAS 2.0 could become the de facto global reference architecture, much like GDPR set the benchmark for data privacy worldwide.
However, adoption hurdles remain. National implementations vary, user uptake is optional, and interoperability testing is ongoing. The EU must balance security with usability to avoid repeating the under-adoption issues of the first eIDAS era.
Still, the regulatory gravity of a 500-million-citizen market cannot be ignored. Financial institutions worldwide are already aligning their identity strategies with EUDI-compatible architectures, anticipating future interoperability demands.
What This Means for Banks and Fintechs
Over the next three years, wallet-ready ecosystems will redefine how BFSI players manage trust and compliance. The competitive edge will belong to those who:
- Integrate wallet credential APIs into onboarding and payment flows.
- Partner with QTSPs like Thales and Signicat for secure digital signing.
- Enable KYC reuse and verification via wallet credentials instead of static documents.
- Re-engineer compliance platforms (like Fenergo CLM) to orchestrate wallet-sourced data.
The transition isn’t just regulatory; it’s architectural. Identity will move from backend plumbing to a strategic differentiator in the digital finance stack.
A Blueprint in the Making
Europe’s bet on eIDAS 2.0 is bold. It turns digital identity from a patchwork of national systems into a single, interoperable network of trust. If successful, the EUDI Wallet could do for identity what SEPA did for payments, create a continental standard that becomes a global export.
Yet the road is steep. Success hinges on user adoption, consistent vendor compliance, and cross-border technical harmony. Vendors like Thales, Signicat, IDnow, Fenergo, and G+D are quietly building that backbone.
The next wave of competitive advantage in fintech may not come from faster payments or cheaper credit, but from who controls the trusted digital identity layer beneath it all.