With eIDAS, the European Commission has provided a powerful yet flexible toolset for developers, consultants and companies to build tools to cater to their specific needs. Each sector of the economy, right from financial services to retail or logistics, has a unique set of requirements but eventually they all can create helpful solutions using the eIDAS apparatus. In this series, we look at some sector specific case studies on how companies can leverage the new and more powerful tools that have been made available to them.
Banks have a big role to play in countering money laundering, organized crime and terrorist financing. Regulators know this and this is why banks have some of the strictest regulations of any sector of the economy (as it should be). However, this also places a significant cost burden on the banks for compliance and this eventually gets passed down to the consumer as well. In addition to the cost, the time delay and cumbersome onboarding experience for the customer can be a major hurdle for organic customer growth.
The digitization of finance with electronic identification, authentication and signing – along with the legal certainty that eIDAS brings – is certainly a game changer for delivering financial products and services. eIDs can be used for complying with government mandated “Know Your Customer”, Anti-Money Laundering and Counter Terror Financing guidelines. The different EU regulations synergize very well and complement each other by enhancing security and trust on the one hand, while proving technologically neutral solutions for achieving it with ease on the other.
Another use case for financial services is the use of qualified electronic signatures for signing financial contracts with clients. This is obviously beneficial for retail customers and even more so for corporate clients. For such large corporate relationships, you have dozens of smaller entities/subsidiaries to bank in scores of countries with hundreds of separate products, and electronic seals can really save time and effort to sign/amend/update contractual data and do it with legal certainty. And each day saved in such cases can lead to significant cost savings for the clients!
Electronic identification and trust services can provide the same benefits to the broader professional services industry as they do to banks and FinTech firms. Consider the following examples:
Professional service providers also have to perform Know Your Customer checks and they can do so with ease using electronic IDs that are valid throughout the EU. This can greatly reduce the cost and turnaround time of performing these checks.
Contracts signed between professional service providers and clients have to be legally binding. Qualified electronic signatures and eSeals defined by eIDAS can provide this legal certainty and have to be treated the same way as handwritten signatures.
Certain professional services require a lot of legal documents to be attested and signed. eSeals can achieve this with greater ease and make the process a whole lot smoother.
eIDAS also allows for electronic registered delivery of documents which may be used for sending important or legally binding contracts without the risk of loss, theft, alterations, forgery and other such risks.
As can be assessed form the above scenarios, the key theme here is time and cost savings, a better user experience, safety and protection from fraud, technological neutrality, legal certainty and finally the sort of cross border compatibility that the EU has been gunning for quite a while. It’s clear that the EU have got a winner on their hands.
Next time, we shall have a look at some other more diverse sectors.