Finland regions

Findynet in Finland paves the way for interoperability

The Nordic countries have been at the forefront of digital payment innovation for decades and the adoption of electronic identity documents (eID) is no different. However, ensuring market openness for electronic identity services while maintaining end-user privacy and security can be a difficult undertaking.

To meet this challenge, Findynet Cooperative, an initiative made up of a group of banks, technology companies and the Finnish government social security agency Kela, recently received a government grant of 3 million euros (3 million dollars) to create a pilot environment for sovereign autonomy. identity network.

The funding will be used to develop a secure, shared identity network – a “self-sovereign” network and allowing individuals to have ownership of their digital identities while maintaining control over their personal data.

The Findynet cooperative will initially focus on financial data, but the notion of digital identity has the potential to impact more than just how people pay and interact with financial services. It could also have implications for other spheres of social life, including education, travel and democracy.

Findynet describes the network in more general terms on its website. “The network of trust, which will now be built, promotes digital and human-centric data economies. This means that end users manage their own data and can decide for themselves what information they share about themselves with different parties in order to maintain their privacy.

Providing examples, the website explains that “this exchange of information could involve electronic receipts, credit information and proof of professional qualifications”.

Finnish eID after TUPAS

Findynet’s focus on interoperability comes at a time when the market for eID services risks becoming fragmented, a relatively new challenge for a country where not so long ago the known eID system under the name of TUPAS dominated the landscape.

Developed by Finland’s largest banks, TUPAS was an authentication solution that once accounted for around 90% of all transactions requiring strong customer authentication (SCA) in the country.

But after government intervention to open the market to competition in 2019, the TUPAS protocol lost its dominance. And after nearly two decades as Finland’s pre-eminent identity solution for the banking industry, its fate was sealed by the EU’s eIDAS regulation, which raised the bar for SCA to the point where TUPAS did not. more reaches the SCA threshold.

Related: The Future of Digital Identity Verification: Driven by Technology, Shaped by Regulators

With TUPAS no longer the dominant technology, the Finnish Trust Network (FTN), a government program providing a single point of access to all eIDs, has opened up the market for digital ID services in the Nordic country. And by focusing on interoperability, the Findynet project can ensure that the newly opened market remains accessible to everyone.

After all, if there is a shared standard and a common network in which all participants are on an equal footing, there is no reason why banks, FinTechs, government agencies and employers should not cannot choose an eID solution of their choice, without running the risk of users losing control of their personal data.

Paving the way to eIDAS 2.0

The Nordic countries are a pioneer region for cutting-edge and innovative digital solutions, and with Findynet, Finland has the opportunity to become a model for other countries developing similar electronic identity systems.

Across the region, similar eID systems such as BankID in Sweden and NemID in Denmark have some of the highest usage rates in Europe. For example, a report by Signicat found that 99% of the Finnish population used some form of eID, while Norway, the Nordic country in the report with the lowest adoption, still had a usage rate of 93%.

Going forward, the kind of interoperability that Findynet pursues will be an essential part of all European eID systems in anticipation of an upcoming regulation known as eIDAS 2.0.

While the European Commission is currently working on an update to EU digital identity legislation, the new framework should ensure that every European has a set of digital identity identifiers recognized across the world. EU.

In the absence of the universal eID system, European mobile wallet operators have moved ahead to build a more integrated ecosystem in which different wallets are fully interoperable.

Read more: EU digital wallets tackle global card networks and work to ensure interoperability

In theory, the new European identity wallet would mean that a French eID could be used to open a bank account in Spain, or an Italian eID used to register with a doctor in Germany. This would significantly streamline bureaucracies across a number of public and private sector activities and reduce the burden on EU citizens currently navigating the fragmented landscape of the bloc’s digital identity systems.

But beyond payments, progress has been slow and it will take a lot more to get things off the ground.

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