Digital identity
Also called digital ID, electronic identity (eID)
A digital identity is a set of verified attributes, such as name and date of birth, that a person can use to prove who they are online. It is issued or checked by a trusted provider and shared electronically. In financial services it lets firms onboard customers remotely without paper documents or branch visits.
How it works
A person verifies once with a trusted provider, such as a government wallet or a certified identity service. When opening an account, the customer shares the needed attributes from that identity with the bank. The bank checks the credential's signature and assurance level, links it to the applicant and records the result in the customer file.
Digital identity cuts onboarding time and reduces document fraud, as long as the assurance level fits the risk. EU member states must offer a European Digital Identity Wallet by December 2026, and banks will be required to accept it. The UK put digital verification services on a statutory trust framework in 2025.
The rules
Requires each member state to provide a European Digital Identity Wallet and obliges regulated firms requiring strong authentication to accept it.
EU member states, trust service providers and relying parties including banksCreates a statutory trust framework, register and trust mark for certified digital identity providers.
Digital verification service providers in the UKExplains how reliable, independent digital ID systems can meet FATF customer identification and verification standards.
Governments and regulated firms in FATF member jurisdictionsCommon questions
Can banks use digital identity for KYC?
Yes. FATF guidance and UK and EU rules allow reliable digital identity to verify customers. Firms assess the assurance level of the provider and match it to the customer's risk.
When must banks accept the EU Digital Identity Wallet?
Member states must offer wallets by the end of 2026. Services that are legally required to verify customer identity, including banks that use strong user authentication, must also accept the wallet for that purpose.
Is a digital identity the same as a scanned passport?
No. A scanned passport is an image that must be checked. A digital identity is a cryptographically signed credential from a trusted issuer that the receiving firm can validate directly.
Our coverage
News and analysis on KYC and identity from RegTech Post.
Read the coverage →RegTech PostKYC in 2024: Balancing Compliance, Privacy, and Customer ExperienceRead the article →RegTech PostSumsub Launches Reusable KYC Gateway With MiniPay as First PartnerRead the article →
