It seems the Irish government has made great progress on the implementation of the European Digital Identity Wallet (EDIW), having developed a prototype for internal testing within government circles. However, despite its steady progress, the government has yet to publicly articulate its plans for engaging the industries that will be legally required to accept the wallet. Moreover, there is a conspicuous absence of transparency regarding the government's decisions or deliberations on pivotal issues that will profoundly impact the success or failure of digital identity in Ireland for years to come.

Clarity on several key aspects is imperative, and it is crucial to involve the implicated relying party industries (financial services, travel, health, education, water, postal, digital platforms and more) to ensure the EDIW's success.

For example;

·      exploring the trade-offs between government-provided and private wallet solutions;

·      establishing trust in the chosen wallet system, addressing sector-specific needs;

·      guaranteeing an excellent user experience;

·      fostering innovation through a robust product roadmap;

·      facilitating cross-sector collaboration;

·      managing risks associated with multiple providers;

·      ensuring EU-wide interoperability;

·      leveraging private sector expertise, and;

·      striking a balance between regulatory responsibilities and user-friendly design.

The government's approach to these critical issues will shape the landscape of digital identity in Ireland, making early and transparent engagement with stakeholders not just beneficial, but essential for the EDIW's successful implementation and adoption.

Key success factors

Transparency: The Irish government must be transparent in its decisions and plans for implementing the EDIW. Citizens and businesses alike need a clear roadmap of how the wallet will be rolled out, what services it will initially support, and how it will evolve over time. This transparency is crucial for building trust and allowing stakeholders to prepare for the changes ahead.

Proactive Industry Engagement: One of the most critical success factors is the government's engagement with industries that are legally obliged to accept the wallet. These include financial services, education, health, postal, digital platforms, telecommunications, and more. By involving these sectors early in the development process, the government can ensure the EDIW meets the specific needs and deliver a solution that works not just for the government, but for industries and their customers as well.

Establishing a Digital Identity Scheme: To govern the EDIW effectively in Ireland, the government needs to establish a comprehensive digital identity scheme. This scheme should outline the rules, standards, and processes for issuing, managing, and using digital identities within the EDIW framework. It should address aspects such as identity proofing, authentication levels, attribute management, and governance structures. The scheme should also define the roles and responsibilities of various stakeholders, including government agencies, private sector entities, and users.

Who will provide wallets in Ireland? A pivotal decision facing the Irish government is whether to recognise and allow third-party or private wallets to rely on the digital identity issued by the government. This approach, similar to the model recently announced by the German government would mean having both a government-issued wallet and at least one private wallet option in Ireland. This decision will have significant implications for competition, innovation, and user choice in the digital identity ecosystem.

Adapting to Evolving Legislation: The implementation of the EDIW must be flexible enough to adapt to changing legislation, particularly in areas like anti-money laundering (AML) regulations. As AML requirements evolve, the EDIW system should be designed with the flexibility to incorporate new verification processes or data points. This adaptability will ensure the long-term viability of the system and its compliance with international standards.

Privacy and Data Protection: Given Ireland's role as a hub for many tech giants, the government must set a high bar for privacy and data protection in its implementation of the EDIW. This includes providing clear guidelines on data usage, storage, and user consent mechanisms.

Creating an Ecosystem for Trust Service Providers: The utility of the EDIW depends heavily on the availability of verified attributes that can be shared through the wallet. The government needs to create an environment that incentivises trust service providers to participate in the ecosystem. This might include regulatory frameworks that support innovation while ensuring data protection, as well as financial incentives for early adopters.

Liability Framework: A critical aspect of the EDIW implementation is establishing a clear liability framework. The government must define who bears responsibility when something goes wrong with the wallet or an identity transaction. This framework should cover scenarios such as identity theft, data breaches, or errors in attribute verification. Clear guidelines on liability will not only protect users but also provide certainty for businesses and service providers adopting the EDIW.

Educating and building trust with the public: For the EDIW to succeed, widespread adoption is crucial. The government must invest in comprehensive education programs to inform citizens about the benefits, security features, and proper use of the digital wallet. Building trust in the system is paramount, and this can only be achieved through protracted campaigns of transparent communication.

Fail to plan, plan to fail – the potential pitfalls

The implementation of the European Digital Identity Wallet (EDIW) in Ireland represents a pivotal moment in the country's digital transformation journey. However, the path to success is fraught with potential pitfalls that could significantly impact Ireland's digital future if not carefully navigated.

• The cornerstone of a successful EDIW implementation lies in early and comprehensive engagement with industry stakeholders. Failure to do so risks creating a solution that doesn't meet the practical needs of businesses and service providers, leading to reluctant adoption and a fragmented user experience. This lack of industry buy-in could undermine the wallet's potential benefits and efficiency gains.
• Trust is paramount in digital identity solutions. If the government fails to address privacy concerns, establish clear liability frameworks, and ensure robust security measures, public confidence in the EDIW could be severely compromised. Low adoption rates could result in an inefficient two-tier system where digital and traditional identity solutions coexist sub-optimally.
• In the competitive European digital market, a poorly implemented EDIW could place Irish businesses at a disadvantage, particularly in cross-border transactions and services. This could have far-reaching consequences for Ireland's economic competitiveness and its position as a tech hub.
• Moreover, a flawed implementation could lead to substantial waste of both public funds and private sector investments. The costs of major system overhauls or addressing low adoption rates could be significant, straining resources that could have been better allocated elsewhere.
• Regulatory compliance, particularly with evolving laws such as anti-money laundering regulations, is crucial. Failure in this area could result in legal challenges, fines, and damage to Ireland's credibility in the international financial community.
• A rigid approach that stifles private sector innovation could cause Ireland to miss out on opportunities to lead in digital identity solutions, potentially impacting its long-term position as a tech hub.
• Perhaps most critically, a failed or poorly executed EDIW implementation could set back Ireland's broader digital transformation efforts, creating scepticism towards future digital initiatives and hindering progress in other important digital services.

In summary, the successful implementation of the EDIW in Ireland requires careful planning, extensive stakeholder engagement, and a flexible approach that balances innovation with regulatory compliance. The government must prioritise transparency, industry collaboration, and public trust to avoid these pitfalls and ensure that the EDIW serves as a catalyst for Ireland's digital advancement rather than a setback to its technological progress.

Nua Léargas and its partners, including Lissi GMBH and Project Foundry are helping their clients navigate the European Digital Identity Wallet, in Ireland and across European Markets. Please do reach out for a informal discussion on how we can help.