A New Era for Digital Identity in Germany

Anne Bailey

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The journey towards digital identity in Germany has been fraught with optimism, failure, and continued persistence. It is currently at a crossroads – consumer and private sector behavior indicate a readiness to embrace digital identity, while the public sector may be vulnerable to path dependency and repeating past mistakes. However, the overall trend is that the new era for digital identity in Germany is arriving: the invitation is sent by the public sector, the solutions being developed by the public sector and in public/private partnerships, and behavior among consumers shifting to accept digital flows. It is up to businesses and service providers to take an active role in leveraging the opportunity of digital identity in Germany by solving concrete use cases through the right technology mix.

Digital identity in Germany is at a pivotal stage, moving towards increased adoption and functionality but requiring an agile approach to succeed. The country can learn from surrounding regional successes and involve private businesses to enhance its digital identity initiatives. The benefits of digital identity, such as improved user experience, reduced transaction abandonment, increased compliance, and customization, make it a valuable asset for businesses. Different digital identity verification methods are available, including eID, bankID, automated flows, reference transfers, and qualified electronic signatures (QES). It is crucial to select the appropriate technology mix that offers high functionality with a user-friendly experience, widespread applicability, and flexibility to meet diverse use cases. Signicat's Digital Identity Platform exemplifies a compelling solution by orchestrating user identity verification through multiple European eID schemes and expanding to Germany and the DACH region. Businesses should educate users, take an iterative approach, and learn from both regional and international success stories to prepare for the broader adoption of digital identity.

Only 26% of German citizens have an eID ready to use, and just 9% have used the national ID in transactions.
Germany's Onlinezugangsgesetz from 2017 aimed to improve online administrative services but saw limited adoption.
The revised eIDAS 2.0 plans for a user-held digital wallet to be interoperable across EU states.
Online banking increased by 7% in Germany in the last year.
Half of all online transactions in Germany in 2022 were paid with internet payment methods.
The global verified identity market is expected to grow to 6.7 billion dollars by 2025.
Gematik removed VideoIdent for health insurers due to security concerns.
Signicat connects to over 30 different eIDs throughout Europe and over 100 different attribute providers for identity verification.
Germany has reduced the number of bank branches by 37% over the last five years.
Estimated digital identity transactions in Germany increased from 1.9M in 2020 to 4M in 2022.

"Germany is at a crossroads: it can continue in a path-dependent way or invite businesses to participate for a more agile approach."
"A digital identity that is verified against a real-world identity and useable across organizations and industries is still a work in progress."
"Businesses should look for the right technology mix which delivers functionality and wide applicability with security and ease of use."
"The benefits of digital identity are clear: An all-digital onboarding flow improves user experience and reduces abandonment."
"Despite less-than-ideal results, the strategic focus on digitization in Germany is not only centered on public services but also on secure digital identity solutions for individuals."
"Behavioral changes demonstrate that the use of digital flows and digital identity are a welcome change by the German public."
"Individuals in Germany are likely ready to use digital identity, but the use cases are only now catching up."
"Digital identity founded in a real-world identity can be issued from different identity providers and should be based on different trust assumptions."
"The compelling growth potential of the verified identity market indicates that the time is right for digital identity adoption in Germany."
"The right technology mix will present high functionality with exceptional user experience."

Identify the appropriate digital identity solutions tailored to your region's regulations and use cases.
Focus on user groups most open to adopting digital identity and leverage their preferences and behaviors.
Create user stories and journeys to streamline identity verification, onboarding, authentication, and signing processes.
Educate users on improved security, data protection, and the ease of digital identity systems.
Ensure compliance with relevant regulations such as the German Anti-Money Laundering Act (GWG).
Learn from digital identity success stories to avoid repeating past failures.
Start with a pilot project and take an iterative approach to refine and enhance your digital identity strategies.
Select flexible and extensible identity solutions to meet the demands of an interconnected world.
Ensure the digital identity solution has widespread applicability, enabling users to interact with various service providers.
Aim for solutions that provide multiple methods for identity verification to ensure secure and efficient processes.

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Digital identity can significantly enhance user experience and compliance for businesses.
The right technology mix is essential but depends on the specific use case and regulatory environment.
Germany needs to ensure its digital identity solutions are user-friendly, secure, and widely applicable.
Private sector participation is crucial for the agile adoption of digital identity in Germany.
Behavioral changes in consumers highlight a readiness to embrace digital identity, supported by increasing digital banking and payments.

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