Deciphering the EU’s New eIDAS Regulation: What You Need to Know

This EU regulation, Electronic Identification, Authentication, and Trust Services, was enacted in 2014 to bolster online security for e-business transactions within the digital single market. It sets a common foundation for secure electronic interactions, helping to prevent online fraud and boosting confidence in electronic transactions.

The eIDAS framework provides a basis for cross-border electronic transactions, paving the way for secure and seamless interactions between businesses, citizens, and public authorities. It ensures that individuals and companies can use their own national electronic identification schemes (eIDs) to access public services in other EU countries where eIDs are available. This EU regulation considerably impacts the digital economy, enhancing trust in electronic transactions and facilitating cross-border public digital services under secure conditions.

The eIDAS regulation sets robust standards for electronic transactions, including creating and verifying digital signatures and electronic seals, time stamps, electronic delivery service, and website authentication. By fostering a predictable regulatory environment for electronic identification and trust services, the eIDAS framework is a critical enabler of the digital single market, driving innovation and competitiveness in the European digital economy.

What does ‘eIDAS’ mean?

‘eIDAS’ is an acronym for Electronic Identification, Authentication and Trust Services. It refers to a set of standards for electronic identification and trust services for electronic transactions in the European Single Market. This EU regulation establishes a legal framework for electronic identification, offering a predictable environment for electronic transactions within the European Union, thereby enhancing online security and data protection.

eIDAS is designed to ensure the integrity, authenticity, and confidentiality of electronic transactions. It provides robust rules for using digital signatures, electronic seals, time stamps, electronic delivery service, and website authentication. Furthermore, eIDAS establishes a legal framework for electronic identification, enabling citizens and businesses to use their own national eID schemes to access public services in other EU countries.

The eIDAS regulation is pivotal for building trust in the digital single market. By providing a common set of standards for electronic transactions, eIDAS enables secure and seamless electronic interactions between businesses, citizens, and public authorities. It facilitates cross-border electronic transactions and enhances the overall security of online services, thereby advancing online authentication and cybersecurity.

What changes does eIDAS 2.0 bring?

eIDAS 2.0, the updated version of the eIDAS regulation, brings several significant changes, all aimed at enhancing online security, data protection, and digital identity. It aims to enhance the effectiveness of the original regulation and extend its benefits to a broader range of services. The overarching goal of eIDAS 2.0 is to foster innovation, enhance trust in the digital single market, and facilitate cross-border electronic transactions. One of the key changes in eIDAS 2.0 is the expansion of the scope of the regulation to include private sector entities. This means that private sector organizations can now also provide electronic identification and trust services, thereby increasing the availability and accessibility of these services. Another significant change is the introduction of a new framework for electronic identification interoperability, which will facilitate cross-border access to services.

eIDAS 2.0 also introduces new provisions to enhance the security of electronic transactions. These include stricter requirements for the security of electronic identification means and enhanced supervision of trust service providers. In addition, eIDAS 2.0 provides for the establishment of a European blockchain services infrastructure, which will further enhance the security and efficiency of electronic transactions. Overall, eIDAS 2.0 represents a significant step forward in the evolution of the digital single market, fostering innovation and competitiveness in the European digital economy.

On February 29, 2024, the European Parliament gave its approval to amend the eIDAS Regulation, pending anticipated approval from the Council in March.

The European Parliament endorsed the revision of Regulation EU 920/2014, commonly referred to as the ‘eIDAS Regulation,’ following negotiations among the EU Parliament, Council, and Commission. The vote count stood at 335 in favor, 190 against, with 31 abstentions.

The approved text will proceed through formal adoption procedures in the Council, with the final adoption expected in March. Subsequent publication in the EU’s Official Journal is anticipated in April, and the text is expected to take effect between April and May 2024.

Exploring the EU Digital Identity Wallet

The EU Digital Identity Wallet is a pioneering digital platform developed by the European Union. This robust platform is designed to offer a secure and universal method of electronic identification across the EU, enhancing online security and streamlining digital transactions. As part of the EU’s broader initiative to establish a single digital market, this wallet is poised to simplify digital interactions across several sectors, including healthcare, banking, and public services. This digital identity tool also serves as a secure storage for personal data, reinforcing data protection and online authentication. Users are granted full control over their data, with the ability to manage who can access their information and for what purpose. The EU Digital Identity Wallet is built on the principles of data minimization, purpose limitation, and transparency, embedding privacy and data protection at the heart of its operations. Interoperability is a key feature of the EU Digital Identity Wallet, allowing usage across all EU member states, irrespective of the user’s nationality or residence. This feature is advantageous for individuals who frequently travel or conduct business across EU countries. It eliminates the need for multiple identity verification methods and simplifies accessing services across borders.

How will the Digital Identity Wallet be used?

The EU Digital Identity Wallet will serve as a universal digital identity verification tool across the European Union. It will be utilized to access a broad range of online services, from banking and healthcare to public services and e-commerce. The wallet can also be used for age verification, digital signatures, and potentially as a digital driving license or passport. Users will have the power to control who can access their data and for what purpose, ensuring robust data protection and privacy. The EU Digital Identity Wallet will also enable secure online transactions, mitigating the risk of identity theft and fraud, thereby strengthening cybersecurity.

Moreover, it will simplify accessing services across different EU countries, eliminating the need for multiple identity verification methods.

The EU Digital Identity Wallet will play a critical role in the EU’s digital single market strategy. By providing a secure and universal method of digital identity verification, it is set to facilitate seamless online interactions across various sectors, thereby boosting the digital economy and enhancing the competitiveness of EU businesses.

Who will develop the EU Digital Identity Wallet?

The development of the EU Digital Identity Wallet is a collaborative effort involving the European Commission, EU member states, and various stakeholders in the digital sector. The European Commission spearheads the initiative, providing the strategic direction and EU regulation framework for developing the digital wallet.

The individual member states will undertake the actual development and implementation of the EU Digital Identity Wallet in line with the guidelines and standards set by the European Commission. This approach ensures that the digital wallet is adaptable to each member state’s specific needs and circumstances while maintaining high interoperability and consistency across the EU. Various stakeholders in the digital sector, including tech companies, digital service providers, and data protection authorities, are also involved in the development process. Their expertise and input are crucial in ensuring the EU Digital Identity Wallet is secure, user-friendly, and compliant with data protection regulations.

Impact of eIDAS 2.0 on Countries and Sectors

The introduction of eIDAS 2.0, a significant evolution of EU regulation, is expected to impact the digital identity landscape across the European Union profoundly. This new framework, which focuses on online security and data protection, is designed to streamline digital transactions, reinforce trust in electronic services, and promote the digital single market. The influence of eIDAS 2.0 extends beyond EU member states, affecting countries within the European Economic Area (EEA) and those engaged in cross-border digital transactions with the EU.

The sectors most likely affected by eIDAS 2.0 include finance, healthcare, e-commerce, and public administration. These sectors heavily depend on digital transactions and electronic identification, making them prime targets for the enhanced online security and trust mechanisms introduced by eIDAS 2.0. For instance, eIDAS 2.0 can facilitate secure and seamless cross-border digital transactions in the finance sector, fostering greater economic integration within the EU.

Which countries and sectors will be affected by eIDAS 2.0?

All EU member states, EEA countries, and nations involved in digital transactions with the EU will be affected by the eIDAS 2.0 regulation. This EU regulation requires these countries to recognize and accept electronic identification and trust services from other countries that comply with eIDAS 2.0. This recognition extends to digital signatures, electronic seals, time stamps, electronic delivery services, and website authentication, all crucial components of online security.

The sectors most affected by eIDAS 2.0 heavily rely on digital transactions and electronic identification. These include the finance sector, e-commerce, healthcare, and public administration. The regulation will also impact the IT sector, as companies must ensure their software and systems comply with eIDAS 2.0 requirements for data protection and cybersecurity.

What changes will eIDAS 2.0 bring to these areas?

The eIDAS 2.0 regulation will significantly change these areas by enhancing digital transactions’ security, trust, and efficiency. It will facilitate the seamless cross-border exchange of electronic identification and trust services, promoting economic integration within the EU and other countries.

eiDAS 2.0 will streamline digital transactions in the finance sector, making them more secure and efficient. This will encourage more consumers and businesses to engage in cross-border transactions, fostering economic growth. eiDAS 2.0 will enhance the security and trust in electronic health records and telemedicine services for the healthcare sector, improving patient care and outcomes. In e-commerce, the regulation will boost consumer trust in online transactions, promoting the growth of the digital single market. eiDAS 2.0 will facilitate secure and efficient digital services for public administration, improving public service delivery and citizen engagement. In conclusion, the eIDAS 2.0 regulation will profoundly impact countries and sectors across the EU and beyond, fostering a secure, trustworthy, and efficient digital single market.

Security and Privacy under eIDAS 2.0

The European Union’s eIDAS 2.0 regulation is critical in ensuring online security and data protection in the digital identity landscape. This EU regulation provides a robust electronic identification and trust services framework, thereby bolstering cybersecurity across member states. eIDAS 2.0 legally recognizes the use of digital signatures, electronic seals, and time stamps, thereby enhancing the security of online transactions.

Interoperability of electronic identification schemes is a crucial aspect of eIDAS 2.0. This EU regulation stipulates that an electronic identification issued in one EU member state should be recognized in all other member states. This ensures seamless online authentication across borders while maintaining stringent data protection protocols.

eIDAS 2.0 also sets rigorous standards for electronic identification and trust service providers. These providers must comply with high technical and operational standards and are subject to regular audits. This ensures that the digital identity of users is managed by reliable providers, thereby enhancing online security. The regulation also provides a framework for resolving electronic identification and trust services disputes, further strengthening data protection measures.

How does the EU Digital Identity Wallet protect personal data?

The EU Digital Identity Wallet is a secure tool for managing digital identity and ensuring data protection. It employs advanced cryptographic techniques to encrypt personal data, enhancing online security. This ensures that personal data remains secure even if the user’s device is compromised.

The EU Digital Identity Wallet puts users in control of their data. Users can choose which data to store in their wallet and who can access it, preventing unauthorized access and misuse. This feature is crucial in ensuring online authentication while maintaining data protection.

The wallet is interoperable with various electronic identification schemes across the EU. This allows users to securely access multiple online services, regardless of location or the service provider. Moreover, the wallet complies with the EU’s stringent data protection laws, ensuring that users’ digital identity is managed in line with the highest data protection standards.

What is the role of pseudonyms in data protection?

Pseudonyms are a crucial tool in data protection, particularly in the context of digital identity. They allow users to conceal their real identity, thereby providing an additional layer of privacy. When a pseudonym is used, the user’s real identity is replaced with a fictitious one, making it harder for unauthorized parties to link the data to the user.

Pseudonyms are particularly useful when data needs to be shared or processed. Using a pseudonym, users can share or process data without revealing their identity. This is essential in maintaining privacy and data protection, especially when dealing with sensitive or confidential data.

The use of pseudonyms can also mitigate the risks associated with data breaches. In a breach, data linked to the pseudonym is less likely to be helpful to the attacker, as it cannot be directly linked to the user. Furthermore, data protection laws such as the EU’s General Data Protection Regulation (GDPR) encourage the use of pseudonymization as a technique to achieve data protection by design and by default, thereby enhancing online security and cybersecurity.

Towards a new era for digital identity 

Before going any further, what do we mean by Digital Identity? It’s more than just the details of your civil status.

What is digital identity?

Digital identity is a “concept with many faces.”

First of all, let’s remember the difference between a “legal” identity, which is linked to the individual’s civil status and is used in particular for administrative or formal procedures, and a so-called “non-legal” identity, which can be employed in a variety of situations, for example, to buy an item on the Internet or sign up for online games. These latter actions could be linked to a pseudonym or, better still, anonymized.

Therefore, the term “digital identity” can be used in the plural, as its uses are as varied as the data that makes it up. This data is called attributes. When linking these attributes to a person, they can include surname, first name, age, place of birth, pseudonym, and much more.

Some attributes, such as place and date of birth or fingerprint, are immutable. Others may change over time, such as address or location.
In addition to creating this digital identity, its verification ensures that one or more attributes are compliant and associated with the right person (proof of ownership).

To accelerate the use of digital identities while ensuring maximum user protection, the European Commission took up the issue in 2022, introducing new provisions designed to raise the requirements. These new provisions are to be found in the regulations known as eIDAS 2.0.

Digital identity accelerated by eiDAS 2.0

Before presenting eIDAS 2.0, it is worth recalling the issues surrounding the first version of this European regulation. The eIDAS 1 regulation, which came into force in 2016, had the following primary objectives:

Creating qualified trust services that are interoperable between European countries
Secure electronic interactions between businesses, citizens, and public authorities within the European Union.


Since its implementation, the eIDAS 1 regulation has enabled the development of online authentication, subscription, and legal commitment. However, adoption has been less widespread. Only 14 EU Member States have notified a digital identity scheme (representing 59% of the population), far from the 80% population coverage target by 2030. The other stumbling block is the need for interoperability between countries.

To achieve its objectives, and in particular the goal of 80% population coverage by 2030, the new eiDAS regulation includes new requirements, such as:

Why use the smartphone as a means of electronic identification?

The smartphone is an ideal medium for electronic identification (e-ID) for several reasons:

Ubiquity and accessibility

Smartphones are ubiquitous these days. Almost everyone has one, making them a means of identification accessible to most people.

In many countries, 80% of the population own a smartphone.

The smartphone’s compact, portable form factor makes it easy to carry and use on the move.

Ease of use

Smartphones have intuitive and interactive user interfaces, making using e-ID applications for authentication and digital signatures easy.

Most people are already familiar with using their smartphones for various tasks, which makes learning to use e-ID applications all the easier.

Increased security

Smartphones can be equipped with advanced security technologies such as biometric sensors (fingerprints, facial recognition) for strong authentication and protection against unauthorized access.

e-ID applications can store identification data securely and encrypted on the smartphone, reducing the risk of theft or forgery.

Multiple functionalities

In addition to identification and digital signature, smartphones can be equipped with additional e-ID functionalities, such as secure storage of identity documents, mobile payment, and electronic voting.

Scalability and flexibility

e-ID smartphone applications can be easily updated and enhanced to add new functionality and meet users’ evolving needs.

What are the uses of digital identity on mobile applications?

In an increasingly connected world, digital identity on mobile applications significantly shapes our daily lives, offering practical and innovative solutions for personal and professional life.

Here are a few possible uses, but the possibilities are almost endless. Let’s take a look at a few examples below.

Digital identity at work

In the modern enterprise, mobile digital identity facilitates secure access to business resources. Employees can use their smartphones to authenticate themselves, access internal applications and buildings (dematerialized badge), and even unlock their computers via secure connections. This simplifies the authentication process while strengthening the security of sensitive company data.

Qualified electronic signature

Mobile digital identity is based on the highest level of identification by combining different elements:

Once the identity has been validated and qualified, once and for all, it is possible to engage a qualified signature that offers the best legal guarantees. Qualified signatures are now more accessible and will gradually become the norm, whatever the document type to be signed.

Mobile electronic signatures will speed up all kinds of transactions with complete security and compliance.

You’ll be able to :

This list needs to be completed, and there are many other possibilities. Once signed, the documents will automatically be stored in the mobile application.

Always within reach

Over time, we have multiplied our storage spaces. It’s hard to track them all, not to mention the risks associated with the lack of security: we spend hours looking for a document.

With this mobile digital identity application, all your documents are at your fingertips. Storing, sharing, everything will become simpler.

Connected health and digital identity

In healthcare, mobile applications are leveraging digital identity to create more integrated healthcare experiences. Patients can securely access their medical records, manage appointments, and even share medical information with healthcare professionals. This simplifies personal health management while ensuring the confidentiality of sensitive data.

Travel and mobility

Think about your travel and business trips. Digital identity on mobile applications allows travelers to simplify their experience, whether checking in for a flight online, booking hotels, or accessing car rental services. Personal information is secure, guaranteeing a hassle-free, personalized experience at every journey stage.

In conclusion, mobile digital identity is no longer simply a collection of data. It becomes a virtual extension of our real identity, optimizing our daily and professional experiences. By highlighting these practical cases, we hope to help everyone visualize how their digital identity can be a valuable ally, simplifying and enhancing various aspects of their lives.

Digital vault: your ally for data backup and confidentiality

Secondly, advancements in cryptography and encryption have made securing digital data feasible. Thirdly, the growth of cloud computing provided readily accessible and scalable infrastructure. Finally, increasing concerns about data breaches and identity theft fueled demand for robust protection measures. Together, these forces propelled the concept of a digital vault from dream to reality, offering a secure haven for our increasingly digital lives.

What is a digital vault?

A digital vault is a secure online storage system that protects sensitive data. It offers users a virtual space to store, organize, and manage digital information securely.

This computer storage system uses advanced encryption techniques to guarantee data security. The operation of a digital safe is based on robust security protocols. Data is encrypted when stored on the digital safe’s servers, making it inaccessible to unauthorized persons. In addition, access to data is protected by robust authentication mechanisms. Digital safes also offer automatic backup features, enabling users to back up their data regularly and reliably. This ensures data availability in the event of a disaster or accidental loss. Moreover, users can access their data anytime and anywhere, as long as they have an Internet connection.

Security of dematerialized data in a digital safe

The security of dematerialized data in a digital safe is a significant concern for users. Providers of these services invest in cutting-edge technologies to guarantee data security and protection. Data encryption is a primary means to ensure information security is stored in a digital safe. Data is converted into an unreadable format using advanced encryption algorithms, guaranteeing confidentiality and preventing unauthorized use. Robust authentication mechanisms, such as secure IDs and passwords, complete the package, and additional verification techniques, such as two-factor authentication, ensure that only authorized persons can access the data.

Regular data backup is also an essential component of dematerialized data security. Digital safe providers make regular backups of stored data to prevent any potential loss or damage.

This ensures that important information is always available, even in an incident. Finally, the physical security of the servers hosting the data is a significant concern for digital safety providers.

They use secure data centers with monitoring systems and access controls to protect the servers from unauthorized access. In conclusion, the security of dematerialized data in a digital safe relies on advanced protection measures, such as data encryption, secure authentication, and regular backup. Users can be confident that their confidential and sensitive information is safe when stored in a digital safe.

What are the advantages of a digital vault?

Protecting and safeguarding sensitive data

Security and protection of sensitive data are essential to any business. Using a digital vault offers numerous advantages in storing, encrypting, and safeguarding sensitive data. First and foremost, a digital safe provides secure storage for sensitive company data. Thanks to advanced IT security measures, confidential information such as contracts, financial data, and customers’ personal details are protected from unauthorized access. Data encryption ensures only authorized persons can access it, reinforcing confidentiality and information protection. In addition, the digital safe offers automatic, regular backup of sensitive data. This prevents data loss in the event of disaster or hardware failure. Data is stored securely in the digital environment, providing a reliable solution that can be accessed anytime. If necessary, backed-up data can be quickly retrieved, facilitating business continuity and efficient management of sensitive information.

Finally, the digital safe guarantees the confidentiality of stored information. Thanks to advanced security measures, only authorized persons can access sensitive data. Access authorizations can be precisely defined, controlling who can view or modify information. This feature enhances data security and prevents the risk of unauthorized disclosure.

Confidentiality and information security

Confidentiality and security of information are crucial for companies. Using a digital safe offers a reliable solution for guaranteeing confidentiality, security, and efficient management of confidential information. Regarding privacy, the digital safe uses advanced encryption mechanisms to protect sensitive data. Information is converted into a format unreadable by any unauthorized person, ensuring that only those with the appropriate access rights can view it. Additionally, activity-tracking functionalities keep track of all actions performed on data, offering greater transparency and accountability. In terms of security, the digital safe uses robust protection measures to prevent attacks and intrusions. The servers on which sensitive data is hosted are highly secure, with firewalls and advanced intrusion detection systems.

What’s more, regular backups ensure that data is protected against loss caused by incidents such as hardware failure or natural disasters. In conclusion, a digital vault offers numerous advantages regarding security, protection, storage, and backup of sensitive data. Thanks to advanced encryption measures, confidentiality of information is guaranteed, while activity tracking features enhance security. As a result, companies can effectively manage their confidential information while complying with current regulations.

Saving time and space

It goes without saying that a digital safe saves space and, therefore, real estate costs. No more boxes piled up in an unsuitable room, where documents deteriorate over time. And with the increase in bad weather and flooding, your documents are also on the front line.

And what about a filing system that only a few insiders can understand? The digital safe integrates different filing rules to suit every company profile. A few clicks are all it takes to find a document.

Digital vault: how can they be used by professionals?

The digital safe offers many advantages for managers, employees, customers, and suppliers.

For managers

The digital safe simplifies relations with public authorities and partners. It makes it possible to quickly retrieve documents required for administrative procedures, such as calls for tender or audits. Moreover, this solution makes sharing documents with accountants, shareholders, and directors easy.

For employees

It offers secure access to their documents, such as pay slips, employment contracts, and health-related documents. It also enables employees to file documents with the company, such as vacation requests or expense claims.

For customers and suppliers

This type of solution simplifies document exchange. Customers can consult invoices and contracts, while suppliers can submit purchase orders or invoices.

So you see. The digital safe is an indispensable tool for companies of all sizes. It simplifies document management, boosts productivity, and improves data security.

How do you choose a digital safe?

To choose the right electronic safe for your needs, it’s essential to consider the following criteria:

Here are some concrete examples of questions you can ask yourself to assess each of these criteria:

You can choose an electronic safe tailored to your needs and requirements by asking yourself these questions.

What is the legal value of an electronic signature?

In fact, the electronic signature makes it possible to eliminate printing, which is an important CSR initiative. From 2025 onwards, most European companies must commit to a CSR approach.

This article will examine the legal implications and the many possible uses. However, it is essential to remember that the electronic signature, like the handwritten one, represents consent and commitment from the person signing.

Consent is a strong act that commits the signatory in the context of an electronic signature. It must be expressed clearly, explicitly, freely, and informedly without constraint or pressure.

In a digital context, consent can take various forms, from a simple click on a box on a form to a qualified electronic signature. The choice of means of obtaining consent will depend essentially on the nature of the commitment.

How can an electronic signature have the same legal value as a handwritten signature?

For an electronic signature to have the same legal value as a handwritten signature, it must meet specific requirements. These requirements are defined by legislation.

What does the law say?

In France, the electronic signature was regulated by Law no. 2000-230 of March 13, 2000, adopted following the European Directive 1999. This law gave electronic signatures the same legal value as handwritten signatures, provided that the process was reliable.

An electronic signature is “a reliable identification process guaranteeing its link with the act to which it relates, and conferring on the latter the authenticity and, where applicable, the integrity of the data to which it refers.”

These articles stipulate that the electronic signature must be :

What about the eIDAS regulation?

Adopted on July 23, 2014, eIDAS (Electronic Identification And Trust Services) is a European regulation that applies to all EU member states. In this sense, eIDAS is a genuine legal innovation that aims to encourage the development of digital uses in Europe.

The eIDAS regulation has had a significant impact on electronic signatures in Europe. It has clarified and harmonized the rules applicable to electronic signatures, facilitating their deployment.

What are the 3 types of electronic signatures?

The eIDAS regulation distinguishes three types of electronic signatures: simple electronic signature, advanced electronic signature, and qualified electronic signature.

The reliability of an electronic signature is based on the signatory’s identification and the signed document’s integrity.

Uses of qualified electronic signatures

The qualified electronic signature is the most secure of all. It carries a presumption of reliability, thus reversing the burden of proof. Thus, in a dispute, the burden of proof is reversed: it is up to the person contesting its validity to prove that it is invalid. In short, qualified electronic signatures are presumed to be reliable. It, therefore, has the same value as a handwritten signature.

It is created using a QSCD (Qualified Signature Creation Device), such as a smart card or a server managed by a Qualified Trust Service Provider (QTSP). This is known as a remote QSCD.

The qualified electronic signature is based on a qualified electronic certificate delivered face-to-face or equivalent after checking the identity of its owner.

A qualified electronic signature is required for specific documents, such as authentic instruments or certain documents subject to administrative control. It is used for documents with high legal risk or regulated transactions.

The uses of advanced electronic signatures

An advanced electronic signature guarantees the authenticity and integrity of the signed document. It is created using a technical process that identifies the signatory and ensures that the document has not been altered.

To present proof of the advanced signature, it must be available, legible, and known by the signature user.

The advanced signature can be issued by a Certification Authority or a PSCQ (in the eIDAS sense).

The advanced signature is highly recommended for signing documents such as commercial contracts, credit agreements, or insurance policies requiring detailed identity verification. It guarantees the identity of the signatory. The integrity of the document is also guaranteed. In the event of a dispute, the burden of proving the authenticity of an advanced signature lies with the party wishing to assert its validity.

Uses of the simple electronic signature

The simple electronic signature is the most common type of electronic signature. However, its reliability and probative value depend on the evidence associated with it.

It is sufficient for documents with low legal or financial risks, such as purchase orders or general terms and conditions of use (GTCU).

It provides proof of the document’s integrity, even if the signatory’s electronic means of identification rely on a limited degree of reliability.

In conclusion

o be legally valid, signed documents must be protected. To avoid any dispute over proof of signature, it is therefore strongly recommended to rely on proven solutions developed by trusted service providers.

Advanced and qualified electronic signatures use a digital certificate associated with the signatory’s name and a secret key managed by be ys. The simple signature, on the other hand, is protected by a server seal affixed by be ys.

The choice of electronic signature level depends on the use and importance of the document to be signed. A high-level electronic signature will be more difficult to contest in a dispute.

Once the signing has been completed, the documents can be stored in a secure digital archive or safe to guarantee their integrity.

KYC and electronic signature: the winning bet for security

KYC (Know Your Customer) and electronic signatures are two essential security tools for companies wishing to protect their data and transactions. KYC makes it possible to identify and verify the identity of a customer or partner. It comes into play in the context of electronic signatures. In fact, they must ensure that the person signing is who they claim to be behind the screen.

There are two ways of verifying identity within the electronic signature:

A KYC process helps combat identity theft. Significantly, the cost of fraud weighs heavily on the global economy. A PwC study revealed that 47% of companies worldwide have been victims of fraud in the last two years. For example, the banking and insurance sector suffered an estimated 525 million euros in fraud in France in 2020.

The KYC process and electronic signature must be integrated into a fully digitized customer experience. The aim is to offer users a fluid, simple, and rapid experience.

How do we combat fraud effectively?

Fraud on the rise? 

The widespread use of teleworking, the proliferation of online shopping, the rise of neobanks, and the advent of cryptocurrencies: in recent years, our working and consumer habits have changed dramatically… much to the delight of fraudsters! For them, the COVID-19 health crisis has multiplied the loopholes and, therefore, the opportunities: from distracted employees to weakened companies, they have taken advantage of the insecurity generated by the pandemic. 

Because employees working outside the company’s secure networks were not the only targets of fraudsters, observers noted an increase in the theft of synthetic identities during the same period, i.e., identities created from a mixture of real and false personally identifiable information. Fraud is everywhere, sparing no one and no sector.

A business open 24 hours a day 

This feeling is all the stronger as there seems to be no respite. Before the health crisis, attacks peaked at the beginning of the week, then declined until reaching their lowest levels at the weekend. Since then, the habits of fraudsters, like our own, have changed. Tuesday, Thursday, Saturday, …: weekdays are no longer necessary to them. They even operate at weekends, all day long, aided by the hyperconnectivity of our societies. 

But fraudsters still need to adapt their opening hours. Their methods, too, have adjusted. Fraudsters now prefer quantity to quality, massive attacks on computer systems to targeted blows. The problem? This flood of less sophisticated attacks diverts attention from the rarer but more ingenious fraud. That’s why it’s so essential for companies to automate fraud detection. Otherwise, they risk needing to be sufficiently protected against large-scale and more sophisticated attacks. 

Fact of the day: 46% of companies reported having been victims of fraud in the last 24 months. 

Fraudsters are as inventive as ever

This is all the more important as fraudsters are not lacking in imagination. Identity fraud is a case in point. Fraudsters could stick to creating hybrid identities. To do this, nothing could be “simpler”: take the elements of a genuine identity, such as name or social security number, and modify them enough to give the impression that it is indeed a real identity. The problem? Hybrid identity fraud is easy to spot. They’re even more accessible to spot when they contain a large amount of accurate data. This makes it easier to cross-check with the real identity. 

Another type of identity theft is synthetic identity fraud. With these, detection by simple data cross-checking is more complex. Which doesn’t mean we have to give up! However, identity verification processes that meet the requirements of KYC regulations prevent them from falling through the cracks. How do they do this? By combining identity document verification and biometric testing. 

The cost of fraud

Getting punished

Above all, they prevent companies and organizations from being penalized. In some sectors, KYC remains a legal obligation. This is particularly true of the financial, insurance, and mutual insurance sectors. European and national regulations oblige players in these sectors to check the identity of their customers and the traceability of their transactions. And if they fail to do so? The regulator is uncompromising. In 2022 alone, the sanctions committee of the French banking regulator, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), fined financial institutions over 14 million euros for failing to meet their regulatory obligations. Of the 39 grievances, more than a third concerned the KYC process. The fines can be substantial. A major insurance company can testify to this. It was fined 3.5 million euros for shortcomings in the fight against money laundering and the financing of terrorism. 

However, fraud and identity theft are not problems unique to the finance or insurance sectors. Real estate, cryptocurrencies, and telecommunications are also affected by this issue. Moreover, all these sectors, as well as energy, mobility, insurance, and online gaming, are not immune to potential fraudsters who would involve their customers in contentious actions. 

Paying a high price

They are just as exposed to another type of penalty. Fraud costs companies dearly. According to the International Monetary Fund (IMF), the volume of money laundering worldwide is between 2% and 5% of the Gross Domestic Product (GDP), or around 233 billion euros. That’s twice the size of France’s budget… It’s easy to see why the fight against money laundering is essential to corporate strategy. 

UK Finance, the trade association for the British banking and financial services sector, estimates that fraudsters will have embezzled more than 700 million euros in the first half of 2022 alone. As for identity theft, the figures are no more reassuring: synthetic identity fraud is estimated to have cost $20 billion! Therefore, not opting for a KYC process would be tantamount to exposing yourself to a double penalty – paying twice! 

Tools to combat fraud effectively

Prevention rather than cure 

However, solutions do exist to combat fraud effectively. The first line of defense? Onboarding, because this is where fraud detection must begin. For a potential customer, onboarding represents the first contact with a company. That’s why it’s essential to associate an identification interface with this stage and, if possible, one that’s as accessible. 

Another tip: don’t rely on a single approach to detecting and preventing fraud. As we have seen, fraudsters redouble their ingenuity to circumvent defense systems and invent new means of action. Companies make themselves more vulnerable by relying on a single form of verification. Hence, it is essential to adopt a multi-layered approach to fraud detection. 

Check who you’re dealing with

This is all the more true given that fraudsters now prefer quantity to quality. That’s why it’s so essential for companies to rely on a trusted third party to integrate an automated KYC process. Solutions such as those we offer enable the capture of identity documents in real-time. The benefits? There are many! These include direct analysis of document security features and automatic recognition of the type of document transmitted. 

Once the information has been automatically extracted, it is checked for veracity and authenticity. At be ys, we do it twice! Our AI carries out an initial analysis in just a few seconds. If this analysis proves incomplete, our experts can take over to ensure all the guarantees of an effective fight against fraud and 100% identity recognition. We can guarantee this because we verify identity using facial recognition tools based on selfies and videos. And, I’m sure you’ll agree, it’s a real asset to verify in real-time that the person behind the screen is whom they claim to be! Particularly in a context of digitalization and the omnipresence of distance, such as the one in which we live and work. 

To go further

n addition to the penalties they risk exposing themselves to by failing to implement KYC processes, companies pay a high price for fraud. Annually, an estimated 233 billion euros go up in smoke due to money laundering. 

Which stage of the business relationship represents the most significant fraud risk for companies? 

There's no single recipe for stopping fraud. But a well-deployed, automated identity verification process is a solid bulwark against fraud and identity theft for companies and customers. 

The KYC challenges: turning constraints into opportunities

KYC stands for “Know Your Customer.” It is a process implemented by businesses and financial institutions to verify and authenticate the identity of their customers. KYC aims to prevent fraud, money laundering, and other illicit activities by ensuring businesses have accurate information about the individuals or entities they engage with, including their identity, financial transactions, and risk profile.

Putting an end to preconceived ideas

In recent years, companies and financial institutions have adopted KYC to verify and authenticate the identity of their customers. KYC involves implementing identity verification checks when a business relationship is entered into and regularly updating the information gathered.

Child’s play? Not necessarily. After all, companies must deal with an ever-increasing number of credentials, more demanding customers, and ever-greater fraud attempts. All these factors are making controls more complex by the day.

Are regulations a brake on growth?

European KYC compliance directives and customer due diligence requirements continue to evolve. It is not just regulatory pressure that makes these requirements increasingly more challenging to meet. The explosion in implementation and maintenance costs and the need to improve the customer experience are just as instrumental in making KYC a hot topic for companies. So it’s easy to understand why they are reluctant to meet their obligations…

And yet! Regulations are not a brake or a constraint for companies. They help establish a framework and the game’s rules to protect their customers and business. A solid, automated KYC process allows companies to know and understand their customers better. The result? Better risk management and more efficient customer service. If well integrated, a KYC process will not slow down growth – quite the opposite.

An additional step to ensure an optimal user experience

This additional step can be experienced as a constraint. To avoid this, the customer must take this step. The identity check should enable them to secure their journey by ensuring that they are the originator of the request. To achieve this, the company the customer wishes to enter into a contract will do everything possible to combat fraud and identity theft.

Their experience will be all the better for it!

Sometimes, users even prefer paths with a bit of friction to others that are too fast and fluid. Take, for example, a visual scanning tool that works so well that users doubt its reliability. To prevent them from giving up on the proposed service, UX designers will undoubtedly suggest adding an artificial waiting time to prevent doubt from taking hold. Friction is not only irritating; it can also be reassuring. The challenge is to find the right balance.

An opportunity, yes, but only tomorrow

Another common misconception? Digital identity is not for tomorrow or even the day after tomorrow. Companies think they have time before they have to tackle the problem head-on.

Time is running out. The eIDAS 2.0 regulation is about to come into force. All European Union member states will have to offer their citizens the option of having a digital wallet containing all their identity documents, the EU Digital Identity Wallet (EUDIW). It may well be that digital identity will become the norm for authentication and identification in the coming years. Why delay implementing a KYC process in your organization?

In concrete terms, eIDAS 2.0 will:

False good ideas

Too many companies try to do without automated KYC processes… at the risk of being penalized; we can’t stress this enough but KYC remains a legal obligation, not just for the finance and insurance sectors. Real estate, cryptocurrency, and telecommunications are also concerned by this issue.

Moreover, all these sectors, energy, mobility, online gaming, and sports betting, are not immune to potential fraudsters.

In particular, these provisions have been reinforced in the 6th Anti Money Laundering Directive, which came into force in June 2021.
One pivotal element within the framework of the 6th Anti-Money Laundering Directive (6AMLD) involves standardizing the definition of money laundering offenses. The significance lies in harmonization, as it will eliminate discrepancies in interpretation among various Member States’ domestic legislations, thereby promoting a more consistent and unified approach in combating illicit activities.

Under the provisions of the 6AMLD, a set of 22 predicate offenses will be introduced including cybercrimes and environmental crimes. This addition signifies the European Union’s heightened awareness of internal issues and its proactive commitment to address emerging challenges.

Checking a person’s identity also helps prevent identity heft, attempts, whether through document or data theft. KYC is, therefore, a win-win process. Customers lose neither their identity nor their money. And companies don’t have to pay heavy fines.

Maximize Savings

Maximize Savings

Choosing to adopt or develop them in-house may initially involve an investment, but in the long run, it proves to be a cost-effective choice compared to not implementing them at all.

That’s why Noémie Boris, compliance lawyer at Be Ys, encourages companies to implement “KYC : is a major challenge for companies wishing to build customer loyalty and reduce costs. A user-friendly KYC solution enables users to complete their journey more quickly and with greater data reliability and allows for compliance with regulation”.

Opportunities to accelerate onboarding

Improving customer paths

All too often, companies rely on outdated or even manual processes for KYC. The consequence for users? Having to wait days or even weeks for their identities to be authenticated. This can discourage some, leading them to abandon their desire to subscribe to a particular service.

Effective KYC processes are seamlessly integrated into the customer journey enabling rather that hindering the customer experience.

To avoid such scenarios, there’s one solution: choose your KYC process with care. It should have four key features:

Human processing ensures maximum reliability, which is only sometimes possible with automatic solutions, particularly for complex and sensitive documents. Some countries have taken steps to supplement video identification with analysis by agents. The guarantee of 100% qualified identity

Accelerate your digital transformation with total security.

Only automated verification can reduce the number of errors and friction for customers without increasing the size of teams or their working hours. Trust those whose job is to develop them, especially as these solutions require official certification, which can be time-consuming and costly to obtain.

So why not consider a KYC solution as an investment in accelerating your company’s digital transformation? Why not make it a competitive differentiator? It’s nothing new that users look with interest at players capable of innovating to meet their legal obligations and expectations.

Positioning yourself as a trusted party

In a competitive, fast-moving market and in the face of ever-changing expectations, there are fewer and fewer opportunities to build customer trust and add value to your service.

A fluid, instantaneous KYC process can multiply them by optimizing the onboarding process, winning new customers while securing your exchanges, which, in the eyes of your customers, will identify you, de facto, as one of the players they can trust. The key is to be aware and seize the opportunity to turn KYC into a business opportunity.

To go further

Being subject to the principle of compliance and good practice helps to demonstrate exemplary business ethics. From this perspective, KYC can become a real competitive advantage. What's more, automated KYC processes enable you to concentrate on your core business, gain operational efficiency, position yourself as a trusted player, and thus double your market share.

For customers, KYC compliance meets the challenge of securing their online transactions. It also benefits them from simplified, smoother online transactions and a better customer experience. It protects both personal data and the customers themselves from any attempt at fraud or identity theft.

Using intelligent document processing and automation solutions that combine artificial intelligence and human expertise. This is the only way to ensure KYC compliance without compromising customer experience and operational performance.