More than 315 million Europeans use the internet every day yet less than 4 percent of online services are offered across national borders, meaning that businesses actually reach only a restricted percentage of that population with their goods and services. With a view to boost economic growth in the EU and to remove the barriers to e-business the European Commission in May this year announced its Digital Single Market Strategy (DSM) which sets out a 16 initiative plan to build a firm foundation for Europe's digital future.

A central issue for DSM has been dealing with trust and security for electronic transactions with work at European level culminating in elDAS, a new European Regulation to take effect on 1 July 2016 which sets out the legal framework for electronic identification (eID) and a new regulatory and supervisory system for electronic trust services and providers in the EU. If elDAS is to fulfill its full potential and enable seamless cross-border e-transactions, existing legislation and national measures may still need review.

Upon the regulation taking effect, when offering cross-border services, member states will have to recognise eID schemes notified under the regulation in another member state although the private sector is under no such obligation. A number of measures have thus been put in place to encourage commercial operators to incorporate elDAS notified eID schemes in their own identification and authentication processes, which could benefit e-finance in the private sector given the considerable pressures from cyber risks and fraud.

Despite the enthusiasm expressed in recent stakeholder meetings with representatives of the financial and insurance services as to how elDAS could have a significant impact on e-finance, commercial operators need to ensure they select eID methods that are adequate for use, with cybercrime an ever growing threat, with mobile devices being particularly susceptible as their use for finance continues to grow.

View the Regulation in full here.