eIDAS helps the financial sector to master its digital transformation

Rechtskonform digitalisieren

Find out how eIDAS is opening up new opportunities and possibilities for the financial sector when it comes to online loans, entering into online insurance policies and for many other applications.

In order to stay ahead of competitors in the long term, banks and insurance companies need to thoroughly digitise their business processes and develop new digital business models. This is where the European Union's Regulation on Electronic Identification and Trust Services for Electronic Transactions in the Internal Market (eIDAS) can provide valuable support. In this interview, Lutz Graf from Bundesdruckerei GmbH explains how eIDAS is opening up new opportunities and possibilities for the financial sector when it comes to online loans, entering into online insurance policies and for many other applications.

How is the financial sector changing as a result of digitisation?

Banks and insurance companies currently face two central digital challenges. First of all, customers are transferring their online shopping experience to the financial sector, i.e. they expect digital products and services that are available quickly, easily and at all times. Secondly, new technology-driven competitors are emerging on the market with customer-friendly, digital offers that are putting the pressure on established financial service providers.

Generally speaking, what does the eIDAS Regulation mean for companies?

The aim of eIDAS is to enable secure and seamless electronic transactions and interaction throughout the EU zone. Electronic communications between companies, public authorities and consumers will be much easier than ever before thanks to a uniform, pan-European legal framework along with new, simplified technical methods. eIDAS is now creating the basis for entirely digital offers and processes.

What provisions and new methods are particularly relevant for the financial sector?

With electronic identification systems (eID), users are to be able to identify themselves online throughout Europe. eIDAS relies on mutual recognition of different national eID systems. This recognition is only mandatory for the public authority sector. Companies, on the other hand, can decide for themselves whether or not to opt for this recognition. For banks and insurance companies, this is extremely interesting because electronic processes can now replace the paper-based identification methods used up to now. This not only saves time and money, the number of new contracts signed will rise due to the convenient service provided. Another two major innovations in this context are the mobile signature and the electronic seal.

There are mobile signature solutions already available on the market. What are the advantages of the remote signature put forward by eIDAS?

Signatures made using a stylus or finger on a pad or smartphone are not recognised before a court of law. That's because they are not qualified electronic signatures as contemplated in the German Act on Digital Signature. One of the most important new aspects of the eIDAS Regulation is the use of legally recognised, yet user-friendly, digital signatures on smartphones and tablets – throughout Europe. Thanks to this so-called remote signature, there is no longer any need for signature cards or readers.  As a qualified electronic remote signature, the signature is also valid for contracts and applications that are required by law to be laid down in writing.

How is legal certainty achieved?

With these new methods, the secret signature keys are stored on the high-security servers of a qualified trust service provider. The remote signature is triggered using two-factor authentication. These mechanisms can be triggered solely by the respective user, either by entering a username and password, using biometric features, for instance, or a transaction code on a mobile phone. Other options will also be made available in the long term.

What is the electronic seal?

In the Internet age, the electronic seal is the digital version of the company stamp. It warrants the origin and integrity of electronic documents and is issued for a specific organisation. Banks and insurance companies who attach an electronic seal to a document clearly identify themselves as the sender while protecting the data against changes.

What plans does Bundesdruckerei have for eIDAS-compliant services?

The eIDAS Regulation has been in effect since 1 July 2016 and Bundesdruckerei will launch first pilot projects in the months to come. The mobile signature will be integrated into the 'sign-me' web platform. Services for the electronic seal are set to follow. Bundesdruckerei can also rely on D-TRUST, a Berlin-based qualified trust service provider as stipulated in the eIDAS Regulation. According to eIDAS, qualified trust service providers meet with the highest security requirements and the strictest liability rules.

What new application possibilities will emerge for financial service providers?

Banks, for instance, will be able to offer online loans in a completely digital workflow. This begins with electronic proof of identity, includes the digital signature and ends with the sealed loan certificate. In addition to informal procedures, insurance companies can perform business processes, which must be in writing, entirely in electronic form. This applies particularly to all application forms that contain questions related to health, for instance, in the case of life insurance or private health insurance policies. Other areas of application include consultancy reports and damage reports required by law which also have to be signed in electronic form.

How high do you rate the business potential?

A recent survey by Bitkom, the association for the IT sector, identified considerable potential for innovative digital financial products. Twenty-five percent of Internet users, for instance, can imagine taking out a loan online, while 22 percent can imagine taking out insurance online. The eIDAS Regulation is helping the financial sector to develop a new strategy for digitisation and to master the digital transformation. The time has come now to act.

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