Potentials and challenges of the Swiss E-ID (1/2)
This is the first part of a two-part series of blog posts on the proof of value of the OpenBankingProject.ch on the topic of “Use of Swiss e-ID”, which took place from October 2024 to February 2025.
Over the past few months, 16 companies have examined the potential and implications of the Swiss e-ID and the corresponding trust infrastructure for the Swiss financial sector. The central objectives of this series of workshops included:
- The basics of self-sovereign identity, the Swiss e-ID (current status, roadmap) and participation in the Confederation’s trust infrastructure (governance, roles, etc.) are known and the opportunities and risks for project participants have been identified.
- Relevant use cases for the Swiss E-ID (e.g. opening a bank account) have been identified and prioritized in terms of added value for customers, increased efficiency, etc.
- The business and technological implications of using the Swiss E-ID for the business architecture of the project participants are derived and analyzed with the involvement of relevant financial service providers.
- The various options forparticipating in the Confederation’s trust infrastructure are evaluated.
The first two objectives of the workshop series are examined in more detail below. The results of objectives 3 and 4 will be detailed in the next blog post.
The Swiss Confederation will provide electronic proof of identity (e-ID) for Swiss citizens in spring 2026. The underlying technical infrastructure is based on the Self-Sovereign Identity architectural approach. These developments offer significant opportunities for the various economic sectors in Switzerland but also challenges in the effective implementation and use of verifiable credentials. In addition to the use of the Swiss e-ID as proof of identification for opening a bank account, participation in the Confederation’s trust infrastructure offers further potential for Swiss banks. The e-ID can be used in other customer processes and significantly improve the customer experience. These include, for example, identification when visiting a branch and re-identification during the customer relationship. In addition, customers can also issue their own proof of identity on the Confederation’s trust infrastructure (source: Swiss Confederation). You can find out more about the concept of self-sovereign identity and the importance of digital identities for business ecosystems in this blog post
Basics of self-sovereign identity, Swiss e-ID and trust infrastructure
The E-ID is the digital form of the identity card or passport. When issued, it is always based on one of the aforementioned documents and is therefore only valid for as long as the underlying document. The E-ID can be issued both physically at the passport office and digitally via a corresponding identification procedure (similar to today’s online identification in accordance with FINMA RS 2016/7). The Swiss E-ID contains the following data points (Excerpt from the E-ID Act [BGEID] (link)):
When using the E-ID, the specific “business-need” must be proven in each case. In this sense, banks may request the relevant information such as official surname, first name, date of birth, nationality, etc. from the future customer for the digital account opening. In contrast, the use of the OASI number should not be permitted, as the bank has no direct use for this data point. Provided it is purely an account/card/payment customer relationship. This goes hand in hand with data minimization, whereby customers or holders only have to disclose the data that is absolutely necessary for the respective business transaction. In this sense, for example, when purchasing alcohol, only the information “older than 18 years” should be shared with the relevant retailer, in this case acting as verifier. The specific date of birth is not mandatory for the transaction and therefore does not have to be disclosed.
The rollout of the e-ID and the corresponding trust infrastructure is scheduled for spring 2026. From this date, further digital proofs of identity should also be available, e.g. e-criminal record extract, e-driver’s license. These additional proofs should significantly increase adoption so that more than 1 million citizens have a federal wallet with corresponding digital proofs by Q1 2027.
For employers in particular (e.g. banks), some of whom want to receive an up-to-date criminal record and/or debt enforcement extract from their employees periodically, the e-ID and the corresponding trust infrastructure with other digital proofs should make things much easier in future. For Generation Z, the vision of leaving the house with just a smartphone and being able to identify themselves (e-ID), use a vehicle (e-driver’s license) and pay (e.g. Apple Pay, Google Pay) should also appear very interesting.
With the release of the public beta in March 2025, Swiss companies now also have a corresponding sandbox environment to test the verification of the E-ID and, if necessary, the issuing of their own credentials. But which use cases are particularly exciting for banks?
Relevant use cases for Swiss banks in the context of verifiable credentials (e.g. E-ID)
In principle, use cases in the context of verifiable credentials can be divided into two categories, namely those in which the bank is the verifier (e.g. use of the E-ID) and those in which it acts as the issuer (e.g. issuing a bank’s own credit score).
When verifying credentials, the OpenBankingProject.ch workshop series primarily analyzed use cases based on the Swiss E-ID. The most exciting use case is likely to be the “onboarding of new customers” and corresponding identification using the E-ID. The project group assumes that the customer journey can be significantly simplified by using the Swiss e-ID and that the conversion rate can be significantly increased as a result. It is assumed that the process steps during identification “scanning the ID document from different sides” and the “live selfie” will no longer be necessary when using the E-ID. Other use cases based on the E-ID include “Identification of employees”, “Identification of authorized signatories”, “Identification of authorized signatories”, “Identification for counter transactions”, “Identification of eVV employees”, “Identification for creating online banking”, “Identification for MLA updates” and “Identification of beneficiaries”. The momentum of the use of the Swiss e-ID could increase over the next few years, particularly in the context of the AMLA revision (Revision of the Anti-Money Laundering Act (link)). Many banks are obliged to carry out a KYC (Know Your Customer) check on existing customers by 2030. There are numerous customer relationships that were opened more than 20 years ago. The bank therefore has a barely legible copy of these customers’ ID cards in its archive. In future, the E-ID could be used for these customers to obtain up-to-date proof of identification as efficiently and customer-friendly as possible. The E-ID can also be used in the bank branch to physically identify customers and thus authorize them for counter transactions, for example. But how exactly is the E-ID verified in these use cases?
The E-ID is requested via a verifiable presentation, which is revealed to the holder either as an app switch (mobile version) or as a QR code (desktop version). The holder then sees the individual data points that are requested and can approve or reject the request. The data is then sent to the verifier in the form of a verifiable presentation. The verifier checks the signature of the holder, the credentials, the issuer and whether the information is valid. It sends a confirmation of successful verification to the holder.
When issuing credentials, banks can issue their customers with various data points or combinations thereof. In the workshop series, for example, an authentication credential was discussed that could be used at ATMs, at the counter, in contact with the call center or for online banking. In addition, the bank can also issue the customer with annual asset statements and interest and capital certificates for tax returns as verifiable credentials in the wallet. Finally, a credit score or a financing confirmation could make it easier for customers to access services in other areas of life. For example, they could implement individual repayment modalities with a customized interest rate for “Buy Now Pay Later” offers
But how can data actually be issued as a verifiable credential? The customer is in an authenticated environment when the credential is issued, for example in their bank’s e-banking system. They then have the option of obtaining the desired information (e.g. credit score) as a verifiable credential in their wallet. To do this, a QR code is presented on the desktop or the customer can switch directly to the wallet via an app switch on their cell phone. The customer then has the option of accepting the credential. This is then created and delivered and the customer can use the credential until it is revoked or withdrawn by the issuer at some point.
Banks can pursue a variety of use cases both as verifiers and issuers, revealing various potentials but also challenges. In this context, several questions arise: What specific professional and technical implications arise from the use cases mentioned? What basic options for action do banks have in the context of the Confederation’s trust infrastructure and what are the corresponding opportunities and risks? These and other questions will be explored in more detail in the second part of this blog post series.
Sources
https://openid.net/specs/openid-4-verifiable-presentations-1_0.html
https://openid.net/specs/openid-4-verifiable-credential-issuance-1_0.html
https://www.admin.ch/gov/de/start/dokumentation/medienmitteilungen.msg-id-90145.html
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