Digital Identity in Germany

Yeah, thank you very much for the invitation there screen is shared. That's great. Yeah. Thanks for the invitation. Thanks. I can share my thoughts on the digital identity market in Germany, you right away. I think there are more or less experts in the room, even if I actually can't see the room or participating virtually. So please excuse if it's a little bit high level, what I'm saying now in 20 minutes, if it's too high level, please feel free to contact me or to, to interrupt me at any stage. Yeah. To start from maybe I think it's useful if I give you a little background.

If I talk about digital identity that I give you a little background about value me first, not for promotional purposes, but that you understand my perspective and where I'm coming from. So just a quick overview. What is vary me? Actually, you might heard ESE is a joint venture. It's a GBH. Yes. It's a privately held company joint venture of currently 21 strategic shareholders. You see some locals here. So pretty renowned companies, as you see, the foundation idea was basically three things.

So first of all, across industry solution was founded of all these players and you see the industries, it's banking, mobility, it's insurance, transport, and telco. And the underlying pillar was the start to catalyze digital workflows by actually creating efficiency for both for the participating partners as well as for the users. And the third part is actually the motivation not to run into dependency as industry players, experience that, for example, in, in payment or in digital search, that there are players from abroad, which created a pretty market dominance.

So today there is, is year the investment of little more than 100 million Euro actually investment that went into the platform. The very new wallet is here. And actually we think it's a leading solution currently in the market, still in MVP stage, but it's covering poor products. It's I end out end sign and payment. It's offering an integrated KYC platform with actually four, six methods. So the one is the wallet then actually for sure you can identify with wallet, but the beauty of it is that there are five other methods for initial, and I will come to the point why that is important.

And actually the operation is pretty much proven so far. So we have more than 40 use cases live with all kinds of, of cases centering around the verified identity. So let's have a look at the market based on this and keeping in mind why actually our shareholders founded the company. So if we look into the German market and, and first of all, it star outside of Germany, I think in the conference already, it became very clear that there are many successful identity schemes out there in Europe.

So I, I don't want to go into detail and the names have been quoted quite sometimes. So that, that is a given. And if we look into the global context, I think we also agree that Google and apple are pretty much pushing forward working on the smartphone integration of digital identities. So what does it mean for Germany?

Actually, first of all, the European dynamics affect Germany and the thoughts around the EU ID bring new dynamics into the market. And there was a lot of discussion already about the U I D. So in a nutshell, what does it mean for the digital identity market? First of all, it's a wallet and the idea is to create a wallet and that's pretty new for, for Germany actually, as they are not too many wallets in the German market yet.

So the term of having a wallet to C created some dynamics, then the next thought is that this one wallet shall be notified for public administration, ensure that one wallet to be notified is rather a German interpretation, but I wouldn't expect that there are more than one wallets to be notified in Germany, even though it's, it might be different in other countries, but as we hear it, it's, it's not too much an invitation for an open market on wallets, actually. And then the third aspect is that this wallet shall be set by legislation to be accepted by regulated players.

So legislation says, if you're a regulated player, you need to accept this notified wallet. So this thought it's just a thought at the stage, but this thought already created quite some dynamics in the market. And if we stick to the public sector, we see that there are still various other streams ongoing. So in the public sector, there is for sure some digital identity activity in eHealth, there's some digital identity activity in financial administration. So the famous Elster, we have the smart ID from Budva endorsing the optimal scheme.

And now we also have the SSI initiative, which is also looking at the public private partnership for an SSI scheme and for wallet. So even if at least smart ID and the Isto scheme around the SSI initiative are about to be merged in our eyes.

There's, there's still quite a lot ongoing in the public sector. If you look in the private sector, we see the first identity service providers that historically offer one time events and now they are moving into wallets. So it's either branded or white label or pure software service model. And there's also very me talked about bear me having operational wallet in the market.

And I don't wanna go into detail if we look into the European bed track still, I think it's worthwhile looking at banks in Germany as well, but for several reasons, and unlike in other markets banks in Germany have not yet managed to really introduce joint solution yet. And, and probably I would say that that mean a window of opportunity for the introduction is pretty much missed if we see the dynamics on the other side. So looking at the overall market, I would say it's pretty evident that the valid solution will be in the solution of choice for the future.

And I think that also makes much sense if we look at what it creates, it actually creates a unification of features that currently are pretty much in silos. And this is a great potential because if you have the verified data and strong authentication on it, you can put together it end and out end and also create authorization and value added services. And in reality, the term wallet in Germany is oftentimes misunderstood and it's misunderstood by saving centrally.

So wallet, as you all know, or could know is fully disconnected from the question where the data is stored, the wallet shall only provide the best and easy access to the data actually. And, and you see that on a simple example already, if you just look at your airline boarding passes that you put in your apple or Google wallet, I mean, it's pretty clear that the ticket itself is not in the wallet, but it's, it's just the wallet just accesses the data at the airline. So we shall never confuse then a wallet with a central storage of the data.

So if we now feel that technically it makes sense to have a wallet still. There's a question whether this creates any benefit for users and partners. And if you look at it, the, the answer is yes, it does create huge benefits. And if you look at that market situation in Germany today, then we see that Germany has a great tradition of one time Ida methods. And we all know the famous pasti event, which is probably the temple Tatu of the Ida market. We all have experienced video events, and this is all very accepted in Germany.

So nobody at the user side is actually complaining, but still it is inconvenient. It creates high transaction costs, low conversion rates at merchants and in a digital society. All these methods are not really state of the art and the benefit that is coming from a wallet that is pretty clear.

I mean, it's convenient for users. It's efficient in handling it's instant for merchants. It's highly efficient in terms of transaction costs and conversion rates. And it simply takes away barriers to entry. So in fact, I mean, all this is underlined by the fact that even identity service providers are thinking about introducing wallets and are even offering wallets. So I think it's not the question whether or not these one time identity methods will, will disappear. It's it's only the time, how fast can we manage?

And then the question is, yeah, if we just think about the identity card in this context, we might say, yeah, but for the identity card, I mean, it's not that frequent. And, you know, I'm, I'm well used to doing my post event and my video event. So there's no real urgency for a change. And this is comparable with your supermarket, you know, where you know where your planes are and, and you get along. And every change is just irritating, but in a digital society, we see that the scope of the digital identity is far beyond just the digital ID card.

And if you look at that, I mean, we all know it's a digital identity card in scope. It is driver license. It's proof of qualification of any kind it's even your employment with the company that can be proven through wallet. And once you have that in a wallet, you can do many value added services like signatures or credit or solvency information and so on. But the initial challenge remains how to get the data in the wallet. And this pretty much is the chicken and egg phenomenon. How will that wallet be filled and where do the initial identity capture?

So, and they're our solution pretty much is to store the identity within the use case. And that means that you always need two things. If you think about an identity wallet, you need to have the, the K YC platform integrated. So an I then hub, which initially identifies the customers and initially gets the digital identity from somewhere. And then you need the actual digital identity wallet where, where you can store the identity. So basically what, what you always need is to experience this an initial identity on a KYT platform and an identity wallet.

And if I go closer into what very we delivers here, our favorite approach on getting initial digital identities in wallet is our bank identity, because it is fully digital by nature. It's just the reference to your current account in the bank. And you can do that at any time, no waiting time, no camera, no technical requirements, no nothing and no ID card, no physical handling of an ID card required. So it's pretty fast and it's fully AML compliant. And once you did that, you can just store it in your wallet. Huh.

And the experience of having a wallet is then again, much better than the experience from a bank event because you actually only need two clicks, huh? It's instant. You can do that. Anytime only two clicks. And this is just, you know, if we just compare bank end the ID card bank end with the ID card wallet. And if we had the, all the other sources and all the other documents, then the beauty of a wallet becomes clear. So having sat all this sounds nice in theory, but the practical acceptance is, is still the big challenge.

Having a state of the art digital journey in the German market still depends on cracking that chicken and egg phenomena phenomena. So what we need to do is getting the wallet into frequent touchpoint, having relevant, trusted use cases. So really getting in there and then creating the best experience with a broad customer reach. And this from a very me perspective can create it through cross industry shareholder network. And I think if we compare that to other European countries, this is proven to be true. You need a cross industry shareholder network.

If we look into the network, it's even a little bit, bit like public private partnership, having the Buddhi on board, representing the public sector here. And just recently you might have heard that many insurance companies have also joined very, because they want to create a real industry standard together with us putting the wallet and the, the, the digital identity in the center and creating other identification and authentication business all around it.

So I'm pretty confident that this way we are well contributing, that we can change and shape as the German landscape and lent escape for digital identities. And I'm also convinced that the private sector in Germany actually needs its own platform and the platform that puts the needs and the business requirements of the private sector as a very first priority, because only then we will probably be able to cope with the global competition and the global challenges that is coming into Europe and, and into Germany regarding digital entities.

So far, very quick run through the German market, of course, were taken a little bias from a very me perspective, but that's where I'm coming from, where I stand for. So please excuse if there were some very me logos in that speech, and I'm happy to discuss whatever perspective or if you have questions.