Two weeks ago Signaturit attended a stakeholder event in Brussels organized by the European Commission to discuss the newly passed Regulation 910/2014 (also known as eIDAS).
Led by Andrea Servida, Head of Task Force Legislation Team (eIDAs), the event aimed to showcase examples of cross-border solutions and elaborate on challenges faced by businesses when implementing the new regulation. Several panel discussions took place focusing on a variety of issues from a regulatory perspective, with specific examples of actions already taken by certain Member States. The debates culminated in a series of suggestions as to how the use of electronic identification could be accelerated throughout Europe.
Read on to find out more about the topics raised during the event and the conclusions drawn, including the main challenges that stakeholders feel Europe faces in the wake of the new eIDAS regulation, which will officially come into force on July 1, 2016.
This post is also available in Spanish.
Different experts were initially asked to voice their opinions with respect to the new legal developments regarding eIDAS. The new law has a notable impact on the financial services industry, not only due to the fact of it being one of the most regulated sectors in Europe, but one in which security is critical for stability. Digitization is set to dramatically affect the entire industry, with regulators striving to seek a balance between guaranteed security for consumers and businesses and creative digital solutions to optimize efficiency.
It was learned that the new Anti-Money Laundering Directive (AML4) and the customer due diligence requirements that allow non-face-to-face identification and verification have been implemented in a number of countries including Germany, Italy and Spain, on the condition that certain safeguards such as electronic signatures are used in transactions.
Geoffroy Goffinet, of the European Banking Authority (EBA), gave a talk about the revision of the Directive on Payment Services (PSD2) (PSD2) and the potential application of the eIDAS regulation for identifying parties involved in a financial transaction. Fintech startups providing Account Information Services (AIS) or Payment Initiation Services (PIS) will now need to verify their identification with Account Service Providers (ASPs or banks) when completing a transaction on behalf of their customers. However, the proposed methods of identification are still in draft form by the EBA - Regulatory Technical Standards - and will not be implemented before October 2018.
On-going pilots of electronic Identity (eID) in Member States
During the event, a number of EU Member States revealed the ways in which the new regulation is benefitting their country. David Rennie, from the UK Government's Digital Service, presented the GOV.UK Verify initative that improves access to public services through digital channels. The UK authorities have realized the importance of digital transactions for the British economy (around 50% of all new bank accounts are opened by people from outside the UK) prompting the creation of Open Identity Exchange, a federated market of identity providers helping people to use online services safely and securely, as well as fostering a relationship between the public and private sectors.
The Estonian Government presented their e-Residency project as an example of how a government can take a startup approach, reach over 7,000 people in less than 6 months and successfully empower them to run their own location-independent businesses. The e-Residency project offers a digital identity for any interested parties, facilitating digital transactions (such as digitally signing documents) through the use of a smart ID card after a face-to-face verification with a governmental representative in Estonia, or at any of their embassies.
Digital onboarding examples
Barclays and BBVA both demonstrated how banks can benefit from the digital onboarding of new customers, with Community Life providing a case study for the insurance sector.
As we have discussed in previous posts, the main challenge faced by businesses nowadays is optimizing customer experience while consistently meeting all regulatory requirements. As compliance standards in the financial sector are by far the most rigid, it is essential for banks to ensure regulatory alignment between different EU legislations, eIDAS, the AML4 and the PSD2 Directives. Consistency between any Member States schemes and the private sector must also be taken into account, as commented by Israel Hernanz of BBVA.
The event was an important opportunity for the Signaturit team to better understand the European eID and Trust Services market environment b from understanding regulators’ intentions behind the EU Regulation 910/2014 to learning best public and private sector practices in other countries. It is abundantly clear that there should be a balance between EU’s harmonization methods and the freedom for innovation to tear down technical barriers for citizens.
From our own experience, the trade-off between usability (customer experience) and the legal obligations faced by businesses is a very important and current debate. As a leading provider of advanced electronic signatures, we see it as the utmost importance to help customers understand the pros and cons of different methods to conduct their digital transactions - ranging from simple electronic signatures to more advanced solutions - while being very clear that a final decision should be made by the client alone. And this is precisely why we offer various eSignature solutions to better adapt our digital tools to individual businesses’ needs.
This post is also available in Spanish.