ETSI-approved IDV versus localized approaches

For European financial services, remote onboarding is a double-edged sword. While the introduction of seamless digital onboarding has spurred strong growth and unlocked new markets, regulated businesses encounter a myriad of identity verification challenges when establishing a local foothold and expanding into new markets and geographies. Sophisticated fraud, varying verification requirements, and a patchwork of global and local restrictions mean businesses are dedicating more time to finding the right solution for these challenges and less time to innovation.

In particular, navigating the continent's patchwork of regulations can feel like a compliance labyrinth. This blog will simplify and compare two potential paths businesses can take when choosing the right identity verification solution: certified identity solutions (such as the Onfido Compliance Suite) or nationally accredited solutions (such as those approved under PVID in France).

France’s regulatory fortress

While there is a clear move towards harmonization, currently, there is a wide range of national schemes that aim to regulate and certify remote onboarding solutions. The natural advantage of schemes such as PVID in France and VideoIdent in Germany is that businesses adhere to standards tailored for the relevant market. Having a bespoke set of guidelines ensures a high level of compliance with local anti-money laundering regulations and acts as a safeguard against fraud. For example, the PVID standard as set out by the French Cybersecurity Agency ANSII requires providers to offer a service equivalent to face-to-face verification using a video capture of the user's document and face, in combination with a manual review by a specialized agent. This undoubtedly offers regulated businesses a high level of assurance but sacrifices the seamless, automated onboarding journey that most customers have come to expect, negatively impacting both the customer experience and conversion rates at onboarding.

However, adhering to strict local regulations is not a one-time challenge for high-growth businesses, and the ideal remote verification solution is one that can support their expansion goals into new markets. Unfortunately, PVID's recognition stops at the border for businesses with pan-European aspirations, which is an example of how any IDV solutions designed for one specific set of regulations will fall short when measured against the other varied regulatory requirements in the EU. While it may feel like progress in the short term, the end result is often like starting right at the beginning of the labyrinth each time you enter a new market.

Finding a better way: QES

Certified identity verification solutions, such as Onfido’s new Compliance Suite, cut through this complexity by leveraging qualified electronic signature (QES) and one-time password (OTP).

QES is a digital signature created using signals unique to the signer and is based on a qualified digital certificate compliant with EU Regulation (UE) 910/2014 Art. 24.1d for electronic transactions within the European market. QES is trusted by financial services globally across a diverse set of use cases, and introducing it as part of the onboarding journey reliably confirms the identity of the signatory and protects both users and businesses against falsification or alteration.

Solutions designed with QES offer a pan-European alternative to the locally accredited solutions for regulated businesses in Europe, or those planning on expanding into the continent, by offering a compelling value proposition:

  1. Seamless expansion: Break down the border walls. Access new European markets without reinventing the compliance wheel in each country.
  2. Enhanced reach: Ditch the video calls. QES & OTP cater to diverse customer segments, even those with limited internet access or technical skills. Reduce unnecessary steps in your onboarding and minimize friction so you don’t keep good customers waiting.
  3. Robust security: QES boasts the highest digital signature security, deterring fraudsters and building rock-solid customer trust.
  4. Minimize ongoing costs: Say goodbye to video infrastructure and local certifications; hello to lower operational costs.

The crossroads of compliance: choosing your path

The future of IDV is not about building fortresses around each nation, but about finding a unified approach to compliance. Locally-accredited solutions might safeguard domestic operations, but Onfido's Compliance Suite unlocks a continent of possibilities. For financial services with pan-European ambitions or those who want the best possible UX to stand out in a crowded market, the choice is clear.

Discover how the Onfido Compliance Suite combines ETSI-certified identity verification (comprising document verification and biometric verification) plus QES in Onfido Studio, to create flexible, user-friendly, and compliant end-to-end workflows.

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