Digital Identity Observatory issues model on EUDI wallet adoption in the private sector

While many are well aware of the work on building regulation for the European digital identity scheme, a lot of questions remain on the adoption of digital ID wallets in the private sector.

The Digital Identity Observatory at the Polytechnic University of Milan attempted to answer some of these questions last week during the Trust Services and eID Forum, organized by EU’s cybersecurity agency ENISA in collaboration with the European Commission.

One of the projects attempting to map out the adoption of the European Union Digital Identity (EUDI) Wallet and digital identity systems in general by private companies is hosted by the Digital Identity Observatory at the Polytechnic University of Milan.

“The aim of this work was to develop a model that can identify different clusters of private companies that can have different behaviors and different approaches toward the wallet,” says Giorgia Paola Dragoni, the Observatory’s project manager and researcher.

The model includes a digital identity awareness index, which measures the level of preparation of a company, as well as the level of regulatory pressure that a company will face. Using these two variables, the Observatory has defined several clusters to group companies according to their relationship to digital ID adoption.

Their research opens many questions but still offers few answers, warns Dragoni.

According to the current legislation, two categories of private companies will be required to adopt digital wallets as an authentication method: The first is private actors with a requirement for strong user authentication, including those operating in transportation, the financial sector, education, telecommunications and others. The second are Very Large Online Platforms (VLOPs), as defined by the Digital Services Act.

The EU has also launched Large-Scale Pilots to test different digital wallet use cases involving many private companies.

European countries are taking different approaches to choosing digital ID wallet providers: Some are choosing private companies while others are relying on institutions and the public sector. But much remains unclear about the future of digital wallets.

“It’s very difficult to forecast what is going to happen,” says Dragoni. “We are seeing now is that big techs really want to play a role in the also in the European market.”

Companies such as Apple and Google are already allowing mobile driving licenses (mDLs) to their digital wallets in some countries and playing a role in certified digital identity outside Europe. In Europe, big tech is also trying to collaborate with governments that have more open approaches. This includes Germany which will allow Google and Samsung to create prototypes for the EUDI Wallet through a government-backed competition.

Institutions can encourage more private firms to get involved with several things, including a clear regulatory base, providing incentives for early adoption and introducing intermediaries to help with the technical integration of digital wallets.

“The last thing, but not the less relevant, is defining a sustainable business model for the wallet, for the roles of wallet provider and credential issuer,” says Dragoni.

Article Topics

digital ID  |  digital identity  |  Digital Identity Observatory  |  Digital Services Act  |  digital wallets  |  ENISA  |  EU Digital Identity Wallet  |  legislation