Meeting the new identity standard: Unlocking global growth with digital ID verification

How financial organizations can streamline electronic ID (eID) verification in the UK, EU, and beyond

Digital identity has reached a tipping point. As identity document issuers, such as governments, launch electronic versions of physical IDs for more convenient and secure digital options, financial institutions and fintechs face mounting pressure to adapt. These financial organizations must balance customer expectations for frictionless experiences with stringent regulatory demands across different markets.

Alloy's new eID solution addresses this challenge head-on, offering financial institutions and fintechs a streamlined path to confidently accept and serve customers, minimize operational friction, and maintain compliance in a multi-faceted global landscape. 

Through intelligent integration of eID verification at customer onboarding and key lifecycle moments, organizations can establish robust perpetual KYC (pKYC) frameworks that take the burden out of compliance work — effectively automating the safeguards that build trust without creating barriers.

What are eIDs, and what do they mean for identity verification?

An eID is a government-recognized method for proving your identity electronically—typically a credential (such as a card, app, or wallet) combined with the backend process that enables services to authenticate users online (and sometimes offline). This combines identity proofing (establishing who the user is) and authentication (proving it each time you log in). 

The adoption of eIDs by consumers may eliminate intermediary steps, allowing individuals to manage their credentials directly. Rather than repeatedly completing lengthy applications or uploading document photos, users simply access their mobile wallet, select the appropriate credential, and authorize secure sharing with the requesting service. eID adoption is also an element of the Self Sovereign Identity (SSI) movement which, is transforming how services are offered, adopted, and services in the digital ecosystem.

How widespread is eID adoption?

eID adoption by individuals is widespread globally, although adoption by financial institutions for verification and other use cases is nascent. According to the World Economic Forum, over 2 billion individuals currently hold a government-issued ID. The potential for additional adoption is high, as 4.8 billion people live in countries where a government-recognized online digital ID is available (i.e., they could obtain one).The European Commission projects that 80% of EU citizens will adopt digital IDs by 2030.

Consumer readiness is already evident. A 2024 survey by Pymnts Intelligence shows that more than 70% of consumers in the UK, US, France, Germany, and Brazil are already using a digital wallet demonstrating the appetite for tools like digital IDs. These figures represent genuine daily usage by millions of people globally who have already made digital identity part of their routine.

What are the advantages of accepting eIDs?

eIDs act as self-sovereign identity ecosystems. For financial organizations, the advantages of accepting eIDs include: 

• Higher velocity: Mobile driver’s license verification completes in approximately 14 seconds — compared to the 200-second average for traditional document scanning. This reduction in processing time translates to a better customer experience and substantial operational savings for financial organizations processing high verification volumes.
• Enhanced security: Digital IDs leverage cryptographic verification, providing far superior fraud protection compared to physical documents that remain vulnerable to sophisticated forgery. The EUDI Wallet architecture embodies privacy-by-design principles, enabling users to disclose only the essential information for each transaction with no excess data exposure. This eliminates the risk of large-scale data breaches from centralized databases. Users maintain encrypted credentials locally and share data through protocols that safeguard private keys from interception or theft.
• User satisfaction: Government-issued digital wallet applications achieve impressive satisfaction rates, with roughly three-quarters of users reporting they're "very or extremely satisfied", despite regional variations. Users particularly appreciate the reduced risk of document loss and the expanding ecosystem where eID verification is accepted.

When regulations drive innovations

Regulatory frameworks are actively accelerating the adoption of digital identity. The UK's Digital Identity and Attributes Trust Framework (DIATF) provides comprehensive standards ensuring eIDs are deployed securely and consistently. This regulation is giving financial institutions the confidence to invest in digital identity infrastructure while reinforcing compliance with financial crime obligations such as anti-money laundering (AML) and counter-terrorist financing (CTF).

Meanwhile, the EUDI regulation has built on the eIDAS to establish a unified digital identity wallet system recognized across all member states. This framework enables secure cross-border transactions by creating standardized protocols for digital authentication, fostering trust in electronic interactions while enabling frictionless digital services throughout the region.

Financial organizations operating across borders must balance opportunity with complexity. While eIDs enable faster market expansion, each region's unique requirements still require coordination.

Enabling more seamless document verification as part of perpetual KYC

eIDs enable a fundamental shift to pKYC: a living, breathing, event-driven KYC framework that responds to customer behavior in real time. When customers trigger risk indicators — such as initiating an international transfer to a new jurisdiction, engaging in unusual transaction patterns, or adding high-risk beneficiaries — eID verification can take place instantly and automatically.

This perpetual approach makes document checks both safer and more convenient. By moving beyond physical IDs that are easily forged or lost, eIDs cut fraud risk while eliminating the need for customers to repeatedly resubmit paperwork. Verification only occurs when risk levels actually change, giving users a smoother experience and giving financial organizations a more efficient path to compliance.

Ensuring this seamless experience depends on technology that can recognize and accept a wide range of digital IDs, forming the foundation for scalable eID verification.

Alloy's unified approach to global identity

For financial institutions expanding internationally, eID implementation traditionally meant vetting multiple regional providers, negotiating separate contracts, building custom integrations for each market, and continuously updating systems as regulations evolved. 

Alloy changes this equation by providing financial institutions and fintechs with access to a pre-vetted, global network of eID providers. Here's what this means in practice:

• For fraud, financial crime, and compliance teams: Streamline document submissions and reviews. Alloy's network already includes the certified providers you need, configured to meet local requirements. When regulations change (as they inevitably do), Alloy adapts to ensure no interruption of the user experience.
• For product teams: Launch confidently in new markets. Whether your customers use France’s FranceConnect+ system, Italy's IO app, or UK DIATF-certified providers, they'll experience the same smooth verification flow. No delayed launches waiting for compliance sign-offs or engineering resources.
• For your bottom line: Eliminate the overhead of managing multiple vendor relationships, reduce engineering costs, and accelerate time-to-market. Alloy’s single integration scales with your ambition.

While competitors struggle with fragmented solutions, Alloy clients can focus on growth, knowing their identity infrastructure is able to extend seamlessly across borders.

Seizing the digital identity opportunity

Financial organizations embracing eID capabilities today position themselves advantageously for tomorrow's markets — ready to expand internationally, exceed regulatory expectations, and deliver the sophisticated digital experiences customers now demand.

As global eID adoption accelerates, the most successful financial organizations will be the ones that integrate this new form of identity into a standard user onboarding and re-verification experience. Alloy's eID solution provides precisely this foundation, converting potential compliance challenges into strategic differentiation. With the right infrastructure and partnerships, financial organizations can move beyond adaptation to leadership in delivering secure, efficient, and customer-centric services on a global level.