The European Union’s eIDAS regulation is a framework that aims to establish a single market for electronic identification and trust services. The EU eIDAS regulation was approved on July 23, 2014, and it became effective on July 1st, 2016, replacing the previous EU Directive on electronic signatures (1999/93/EC).
Its goal is to facilitate secure and efficient online transactions, particularly for businesses, by establishing common standards and rules for electronic signatures and seals, electronic authentication, and electronic trust services. The eIDAS standards enable businesses to carry out KYC (Know Your Customer) checks, which is the process of verifying customers’ identities to prevent fraud and money laundering, in a secure and efficient manner.
Ultimately, compliance with the eIDAS regulation is important for businesses in order to avoid financial penalties, reputational damage, legal challenges, and competitive disadvantages. It is also essential for maintaining the integrity of online transactions and building trust with customers and other stakeholders.
This blog aims to provide you with an understanding of eIDAS and its role in enabling secure and efficient online transactions through KYC. Furthermore, we will reveal solutions that you can use in your identity verification process to comply with eIDAS regulations.
Requirements of eIDAS
The EU eIDAS regulation establishes several requirements for electronic identification and trust services within the European Union. Some of the most essential requirements include:
- Qualified electronic signatures and seals
- Electronic authentication
- Trust services
Qualified electronic signatures and seals
A qualified electronic signature (QES) or qualified electronic seal (QESeal) is an electronic signature that complies with the eIDAS Regulation of the European Union, which lays forth certain legal standards. It serves as a means of verifying the signer’s identity and ensuring that the document has not been tampered with.
A cryptographic procedure is used to produce the signature, which is connected to the identity of the signatory (i.e. the person who signs the document). When it comes to signing legally binding papers, a QES is comparable to a handwritten signature. To validate the identity of the signature and guarantee that the document has not been tampered with, a QESeal (a digital version of a physical seal) is employed.
Electronic authentication, also known as e-authentication, refers to the process of verifying the identity of an individual or organization through the use of electronic means such as a password, digital certificate, or biometric data. eIDAS requires that electronic authentication service providers are qualified and recognized by national supervisory authorities.
These are electronic services that help establish trust in online transactions, such as electronic time stamping, electronic registered delivery, and electronic document and data preservation. eIDAS requires that trust service providers are qualified and recognized by national supervisory authorities.
Overall, eIDAS aims to create a consistent and secure framework for electronic identification and trust services within the EU. Therefore, it enables businesses and individuals to conduct online transactions with confidence by ensuring that electronic identification systems are reliable and trustworthy.
Who has to comply with eIDAS?
The EU eIDAS regulation applies to all member states of the European Union and the European Economic Area (EEA), which includes Norway, Iceland, and Liechtenstein. This means that any organization operating within these regions is required to comply with eIDAS.
Therefore, businesses of all sizes, as well as public sector organizations that use electronic identification and trust services, are included. For example, banks, insurance companies, online retailers, and other businesses that conduct online transactions may need to comply with eIDAS.
In addition, eIDAS applies to electronic service providers, such as electronic authentication service providers and trust service providers. These providers must be qualified and recognized by national supervisory authorities in order to offer their services within the EU and EEA
Overall, it’s important for these organizations to ensure compliance with eIDAS to avoid financial penalties and legal challenges and maintain the integrity and reliability of their electronic services.
Let’s have a look at the main reasons to comply with eIDAS.
Why do organizations need to comply with eIDAS?
Compliance with eIDAS can help organizations protect themselves and their customers from fraud and other types of online crime, as it establishes common standards for the security and reliability of electronic identification and trust services.
Organizations need to comply with eIDAS regulations for a number of reasons, let’s take a look at the main ones:
- Legal requirements
- Security and reliability
- Competitive advantages
- Customers’ trust
Legal requirements: eIDAS is a legally binding regulation that applies to all member states of the European Union and the European Economic Area (EEA). Organizations that operate within these regions are required to comply with eIDAS in order to avoid financial penalties and legal challenges.
Security and reliability: eIDAS establishes common standards and rules for electronic identification and trust services, ensuring that these services are secure and reliable. By complying with eIDAS, organizations can better protect themselves and their customers from fraud and other types of online crime.
Competitive advantages: Companies that are compliant with eIDAS regulations may have a competitive advantage in the marketplace, as they are able to offer electronic services that are trusted and widely accepted. This can help to attract and retain customers, as well as build trust and credibility with stakeholders.
Customers’ trust: Compliance with eIDAS regulations can help organizations build trust with their customers, as it demonstrates a commitment to security and reliability. This can be especially important for businesses that rely on electronic transactions, as customers may be more hesitant to conduct business online without the assurance of strong security measures.
Compliance with eIDAS can help organizations protect themselves and their customers from fraud and other types of online crime, while also meeting legal requirements, increasing security and reliability, and gaining competitive advantages and customer trust.
Does your organization have an electronic identification system? If you still don’t have one or want to change your provider, have a look at Klippa’s identity verification solution below.
Set up your own electronic verification with Klippa
In order to be compliant with eIDAS in your KYC processes, you need a solution that can help you verify your users’ identities. We at Klippa, can help you with this!
By using Klippa’s Identity Verification, you can make sure that your client onboarding procedure is reliable, safe, and quick enough to eliminate the need for human processing of your customers’ IDs through electronic ID verification.
The following features of our ID verification software are the reasons why we can support various use cases:
- Biometric verification
- ID card verification
- Liveness detection
- NFC ID verification
Why use Klippa’s ID Verification?
Using Klippa’s ID verification solution can grant you multiple benefits, here is a list to name a few:
- Improved safety & security
- Faster customer onboarding
- Easy to implement via SDK or API
- Automated data extraction
- Fraud prevention through biometric checks, and EXIF data analysis
Every feature of Klippa’s Identity Verification adds layers of security to your identity verification process and can help you prevent identity theft, ultimately enhancing your AML & KYC compliance. With customization possibilities and well-structured documentation, you can implement our solution via SDK or API with ease.
Do you still have questions about our Identity Verification Solution? Feel free to contact us or book a demo below to see how our solution works.