Katherine Yeung, Chief Risk & Compliance Officer at 10x Banking, attended Money 20/20 Europe conference in Amsterdam this month. Here she shares her reflections on the future of digital identity.
I had the pleasure of attending Money 20/20 in Amsterdam this month to take part in a panel about the future of digital identity and also to talk to Sumsub about my role.
These conversations confirmed an evolution we’ve been aware of for a while, but never quite put a name to: digital identity has matured from a static compliance requirement into a dynamic growth catalyst for financial services.
The conversation has shifted, and fundamentally so. The industry is no longer asking "How do we meet regulations?" but rather "How can identity unlock new value?"
1. The Economic Imperative and Evolving Trust Landscape
Extending full digital ID coverage could generate economic value equivalent to 3–13% of GDP by 2030, according to McKinsey research.
But the potential of digital identity extends way beyond efficiency. Younger generations, as highlighted by Checkout.com’s research, which was exhibited at Money 20/20, are much more open to digital ID solutions. They view them not as intrusions but enablers of experience.
Beyond this generational shift, digital identity is becoming essential trust infrastructure – especially with the EU’s 2026 mandate for a digital identity wallet acting as a powerful catalyst for cross-border interoperability. It marks the transformation of digital ID into a financial services imperative and brings into focus the importance of infrastructure transformation.
2. Reframing Identity: Introducing "3D Thinking"
The industry is moving decisively beyond exploration. Banks and financial institutions are moving to implement digital identity solutions at scale. There are three critical capabilities currently being prioritised:
- Programmable privacy, giving users granular control over data sharing
- Decentralised identity models
- API-driven integration
During the panel discussion, I proposed the "3D Thinking" framework to harness identity’s strategic potential:
- Data Aggregation: For this, you need a unified data fabric that connects fragmented sources - eIDAS2 wallets, biometric databases, transaction histories - in real time. Without effective data aggregation, banks face ‘identity blind spots.’ For example, when eIDAS2 wallets launch in 2026, FIs using batch-processing cores won’t instantly verify citizen IDs, resulting inat risk of onboarding delays and regulatory exposure.
- Decision-Making: Next, you need a decision automation engine. Identity decisions must happen in milliseconds - not days, which requires two key capabilities. The first is processing scale, to handle AI-driven fraud checks across millions of accounts. The second is access to granular APIs to enforce precise actions, like unfreezing only a savings account linked to suspicious activity, while keeping credit lines active. Without this, you get blunt-force responses: 28% of fraud breaches stem from system errors like wrongful freezes (Source: Verizon).
- Dynamic Deployment: Identity must be continuously actionable. This requires API-first architecture enabling seamless interoperability and real-time updates. True interoperability is about architecting cores to normalise disparate data formats (e.g., EU digital wallets vs. US Social Security IDs). Banks can achieve this interoperability via content orchestration and adaptive policy engines. These allow banks to embed privacy controls into data flows and dynamically apply regional rules.
Legacy cores fail to deliver this 3D Thinking approach because they hardware compliance logic, the upshot being that banks must choose between innovation or regulation. Modern cores – such as 10x Banking’s meta core - can solve this by streaming data continuously at the scale today’s banks require, turning silos into a single source of truth from which innovation can spring, without compromising on compliance.
In B2B contexts, "KYC as a service" can also become a revenue-generating, streamlined onboarding experience shared across ecosystems. By productising their compliance expertise, banks can monetise KYC verifications for ecosystem partners (e.g., fintechs or other FIs). Shared KYC utilities eliminate redundant checks, dramatically accelerating corporate onboarding while generating new fee income and strengthening partner loyalty through streamlined experiences.
For consumers, hyper-personalisation also becomes achievable – imagine financial products dynamically adapting to an individual’s real-time financial footprint and life events. Identity ceases to be just about verification; it reveals unmet needs and enables proactive service.
3. Interoperability, AI, and Collaboration
Interoperability is non-negotiable. As open banking expands into open data, ecosystems require frameworks that function seamlessly across borders and sectors. Public-private partnerships and regulatory alignment, like the EU wallet initiative, are essential.
Additionally, AI’s role is expanding beyond fraud detection into adaptive intelligence. Systems must continuously learn amidst evolving regulations and sophisticated threats to maintain trust and efficacy.
The Path Forward
Digital identity has moved from the back office to the strategic forefront. The institutions poised to win are leveraging it not just for security and compliance, but to radically accelerate onboarding, design intuitive products, and build deeper, more trusted customer relationships.
The infrastructure enabling this – interoperable, API-native, and adaptable – is the bedrock upon which the next generation of financial services growth will be built.
