Digital identity is quickly becoming essential for businesses across the European Union.

What Is Digital Identity and Why Does It Matter?

Digital identity refers to the use of electronic credentials and tools to securely identify businesses, employees, and individuals online. The EU has taken major steps to ensure secure and trusted digital identities through frameworks such as eIDAS (Electronic Identification, Authentication, and Trust Services). With the introduction of eIDAS 2.0, the scope and impact for businesses have expanded dramatically.

EU Policy: Building a Trusted Digital Identity Ecosystem

The eIDAS Regulation, overseen by the European Commission, sets legal standards for electronic identification and trust services in all EU Member States. eIDAS 2.0 is introducing a European Digital Identity Wallet, allowing citizens and businesses to prove their identity and share documents digitally across borders. This means your business will soon be able to interact with customers and partners throughout the EU using trusted, standardised digital identifiers.

For example, SMEs will be able to sign contracts, submit documents, or access cross-border e-services without extensive paperwork. According to the European Commission, this can streamline onboarding, reduce fraud, and improve access to digital markets.

Real-World Business Applications

• Customer Onboarding: Banks and fintech providers can verify identities securely and quickly, complying with Anti-Money Laundering (AML) requirements using recognised eIDs from any EU country.
• Supplier Management: Registering new suppliers or partners across borders becomes more efficient by accepting trusted digital credentials, reducing administrative overhead.
• Government Interactions: Businesses can use digital identity wallets to submit reports or apply for permits electronically with municipal or national authorities, as foreseen in the Single Digital Gateway Regulation.
• Hiring and HR: Verification of diplomas, right-to-work status, or professional licences will become faster and more reliable when credentials are issued and attested digitally.

How to Get Started

The European Commission recommends businesses take early steps to familiarise themselves with eIDAS-compliant services. This might include:

• Engaging with national eID or trust service providers listed on the EU Trusted List: https://eidas.ec.europa.eu/efda/trust-services/browse/eidas/tls
• Monitoring updates at the official Digital Identity webpage: https://digital-strategy.ec.europa.eu/en/policies/eudi-regulation Checking local Chamber of Commerce or business associations for training and guidance.

Key Considerations and Next Steps

To prepare, businesses should assess which processes involve identity checks or document verification and explore pilot projects for digital onboarding or signing. Evaluating security needs, privacy obligations under GDPR, and interoperability with EU-wide services will be important as eIDAS 2.0 is rolled out across the Union.

Summary

Digital identity isn't just a future trend—it's already reshaping how business is done across Europe. By starting to explore EU digital identity solutions now, companies can streamline compliance, improve customer experiences, and position themselves for automated, trustworthy cross-border operations.