Impact of the European Digital Identity Wallet application on financial services 

The EUDI Wallet is set to transform how financial services are accessed across the EU. In this article, Jane Sabal, lawyer at Ellex in Estonia, and Anneli Krunks, the head of fintech, explain why it is essential that operations associated with financial services are also possible to carry out digitally. In Estonia, we are used to accessing financial services simply by logging into a corresponding mobile application using digital identification (for example facial biometrics). Signing new service contract or terminating existing one is also done using a digital signature. While these solutions are self-evident for us, they are not yet a standard across Europe. The spread of digital services (including financial services) requires a more common approach in the European Union and a creation of a digital solution.

European Digital Identity Wallet (EUDI Wallet)

EUDI Wallet is an application that allows all European Union citizens, residents, and businesses to digitally prove their identity, store and share identity documents, and conduct digital transactions. Usage of the EUDI Wallet should be free for individuals and the EU member states will have the right to decide whether businesses should be subject to fees to use wallet services.

Estonia has been a pioneer in technological development for years. The ID-card, Mobile-ID, and Smart-ID are integral parts of our daily lives, through which we can identify ourselves digitally as well as use for doing transactions. Many other EU countries do not have such digital solutions, and there has been a lack of unified approach and digital solutions within the EU. Therefore, the EUDI Wallet represents a revolutionary step in managing one’s digital identity, enabling standardized principles and cross-border digital transactions.

Possibilities of using the EUDI Wallet

There are numerous ways to use the EUDI Wallet. It helps to securely identify and authenticate individuals, particularly simplifying identification in case of cross-border services. In other words, if previously the solutions of the respective country had to be used to identify oneself when using a service in another EU country, then in the future, it should be possible to identify oneself in every EU country with the help of the EUDI Wallet. This should significantly simplify access to digital services (including financial services) across member states.

Additionally, the EUDI Wallet allows various transactions to be conducted digitally. In the future, it should be possible to sign documents using the EUDI Wallet in any EU country. (Public) legal persons should be able to certify documents using an electronic seal (e.g., diplomas). This means that in the future, it is possible to perform digital transactions uniformly and swiftly by using a standardized application across all EU countries, simplifying transactions, especially cross-border ones.

The EUDI Wallet also includes functionality for storing and accessing data. It can store various identity documents and other data (for example diplomas).

Impact of the EUDI Wallet on financial services

The EUDI Wallet enables easier and smoother provision of digital and automated financial services.

The EUDI Wallet would have a significant impact, for example, on ensuring the compliance with anti-money laundering requirements for financial institutions. It simplifies identification process of individuals when establishing and during the business relationship. In addition to authentication, customers can easily share other necessary data with financial institutions using the EUDI Wallet. This reduces reliance on solutions provided by private companies, thereby making compliance with anti-money laundering requirements simpler and more cost-effective for financial institutions.

Furthermore, the EUDI Wallet has a considerable impact on overall consumption of financial services and conducting financial transactions. It allows to enter into and terminate new financial service contracts digitally, to confirm financial transactions (e.g., make payments) digitally, and to conduct other financial service operations digitally across any EU member state.

The EUDI Wallet solution offers positive opportunities for all financial institutions, particularly to those providing digital and cross-border financial services. It will make the provision of financial services easier, faster and cheaper, and promotes the spread of digital financial services across Europe.

However, it is important to note that the use of the EUDI Wallet is voluntary, which means that, at least in the beginning, existing country-specific solutions will likely remain. With wider adoption, the EUDI Wallet could become the primary application for digital identity across the EU.

The legal aspects of the EUDI Wallet solution are regulated by the European Digital Identity Regulation. Currently, the testing of the digital solution is underway, with the participation of public sector institutions from different countries as well as private sector companies. According to current plans, the introduction of the EUDI Wallet application is scheduled for the end of 2026.

The article was originally published in Estonian on 28 May 2025 on finantsuudised.ee.