EU Firms Face Dual Compliance Burden as eIDAS 2.0 and AMLR Take Effect

European businesses are preparing for sustained operational strain as two major regulatory frameworks—eIDAS 2.0 and the Anti-Money Laundering Regulation (AMLR)—come into effect, forcing firms to support new European Digital Identity Wallets alongside existing national systems. Identity provider Signicat launched a unified platform to address what it describes as a transition phase marked by fragmentation and parallel compliance requirements, as businesses must manage overlapping systems for onboarding, authentication, and fraud prevention across multiple jurisdictions.

Dual Systems Create Operational Pressure

The introduction of the European Digital Identity Wallet under eIDAS 2.0 is designed to standardize identity verification across the European Union, but its rollout will not replace existing systems immediately. Instead, businesses will need to support both frameworks simultaneously for several years, handling users who rely on established national IDs as well as those adopting the new wallet.

This dual requirement affects core functions such as customer onboarding and compliance checks, where firms must verify identity in line with both regulatory standards. The addition of AMLR requirements further increases the burden, as companies must ensure that identity verification processes meet stricter anti-money laundering rules while maintaining a consistent user experience.

The need to run parallel systems raises concerns about cost, scalability, and reliability. Firms must decide whether to build internal solutions capable of handling multiple identity sources or rely on third-party providers that can aggregate these systems into a single interface.

Allard Keuter, Head of Authentication & Wallets at Signicat, commented on the operational reality: “For the next three years, digital identity in Europe will be organized chaos. Businesses will be legally required to accept a new wallet that most of their customers don’t have yet, all while supporting the existing national and banking ID systems. We designed the hub because trying to manage that fragmentation internally would be a technical and financial burden for most companies.”

The reference to a multi-year transition highlights that the issue is not limited to the initial rollout of the wallet. It reflects a longer phase where adoption levels vary across countries and user groups, requiring systems that can handle different identity methods without disrupting service delivery.

Signicat Launches Unified Identity Gateway

To address the fragmentation, Signicat launched its eID and Wallet Hub, which acts as a single integration point for businesses to access multiple identity verification methods. The platform connects to both the new European Digital Identity Wallets and existing national eIDs, as well as other sources such as biometric verification.

According to the company, the hub processes more than 500 million transactions annually, indicating it already operates at scale within the identity verification market. By consolidating different identity systems into one interface, the platform aims to reduce the need for firms to build and maintain separate integrations for each method.

A central element of the system is its hybrid infrastructure, which allows businesses to retrieve data either directly from a user’s wallet or through Signicat’s network of identity sources. This approach is designed to handle cases where users have not yet adopted the wallet or where specific data is not available within it.

Keuter explained the hybrid model’s purpose: “The real power of the wallet is putting users in control of their data. Our hub is built for that reality. It allows companies to request any data they need, whether the user has a wallet or if the information is even in it. This hybrid approach ensures a seamless experience and means companies can be ready for the future without disrupting their services today.”

The hybrid model reflects the uncertainty around how quickly the new wallet will be adopted. Rather than assuming immediate uptake, the system is designed to function across different adoption stages, allowing businesses to comply with regulations without relying on a single identity method.

Regulatory Shift Reshapes Identity Infrastructure

The rollout of the European Digital Identity Wallet is part of a broader policy initiative aimed at creating a unified digital identity framework across the European Union. The system is expected to affect more than 450 million citizens, with a target of reaching 80% adoption by 2030.

For businesses, the transition represents a structural change in how identity is managed. Instead of relying solely on national systems or private verification methods, firms will need to integrate a standardized European solution while maintaining compatibility with existing frameworks. That shift requires investment in infrastructure and changes to how identity data is accessed, stored, and processed.

The introduction of AMLR alongside eIDAS 2.0 adds another layer of complexity, as identity verification must also meet stricter compliance standards related to financial crime prevention. This combination increases the importance of having systems that can adapt quickly to regulatory changes without requiring repeated redevelopment.

Platforms like Signicat’s hub are positioned as a way to manage that transition, but they also concentrate reliance on external providers. While this can reduce development costs, it introduces dependency on third-party infrastructure, which firms must assess in terms of resilience, security, and regulatory alignment.

The coming years are likely to test how well these systems handle scale and variation across the European market. Adoption rates for the digital wallet may differ by country, and user behavior may not follow a uniform pattern. Businesses will need to remain flexible, ensuring that identity verification processes continue to function regardless of how quickly the new framework takes hold.