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FinTechs belonging to this category provide identification services, which are required for most banking services.
Introduction
Attitude of the country towards identification services
There are not specific reservations related to such services. Compliance with data privacy law especially in light of the EU General Data Protection Regulation (“GDPR”) is considered crucial with regard to such services
Legal affairs
Obligations and requirements to provide identification services
Qualified trust service providers, certified email service providers and digital identity providers shall be enrolled with the National Digital Agency (Agenzia per l’Italia Digitale – “AGID”).
To this extent, they shall comply with certain requirements set out under both the Italian Digital Public Administration Code (Legislative Decree no. 82 of March 7, 2005 as lastly amended in 2017 – “CAD”) and the EU e-IDAS Regulation (EU Regulation no. 910/2014 on electronic identification and trust services for electronic transactions in the internal market). For instance, qualified service providers shall employ staff and subcontractors with the necessary expertise and qualifications, and who have received appropriate training regarding security and personal data protection rules.
In this regard, Section 29 of the CAD required qualified trust service providers, certified email service providers and digital identity providers to have a minimum initial capital which could vary up to EUR 5 million depending on the provided services. The minimum initial capital requirements for qualified trust service providers have been recently repealed, with effect from the adoption of a presidential decree detailing the requirements that shall be complied with by such providers.
The e-IDAS Regulation has been recently updated by Regulation (EU) 2024/1183 establishing the European Digital Identity Framework, which most notably (i) considers as trust services also electronic archiving of electronic data/documents and electronic ledgers and (ii) introduces the EU Digital Identity Wallet, an electronic identification means to store, manage and validate person identification data and electronic attestations. In this regard, Italy has already introduced provisions regulating the Italian Digital Wallet System (so-called IT Wallet), which will be fully implemented likely in the following months.
Additional comments regarding the legal situation for identification services or what FinTech’s must be aware of in this business area
Qualified trust service providers may be registering in other EU States.
Economic conditions
Market size for identification services and biggest companies in this business area
A public system for digital identities has been established by the Italian legislator and recently implemented by the Italian government.