From UK to EU: How Fintechs Use Local eIDs to Comply & Grow

For a UK Fintech planning the next stage of their growth into Europe can often involve significant hurdles, such as navigating diverse compliance regulations along with local identity verification and AML requirements.

These challenges have been somewhat compounded by Brexit, where trading across borders is a challenge for UK business, particularly as the EU moves towards Identity harmonisation through the EU ID Wallets programme (more on this below).

The European community has seen exponential growth in digital finance, where secure, frictionless customer onboarding has become essential for business success, as such each European country maintains its own digital identity scheme, technical standards and regulatory framework.

Underpinned by the EIDAS regulations (which is not necessarily followed in the UK), the local eID schemes have also become a way of life for European consumers in relation to how they enable trust in their interactions with digital channels.

The Cross-Border Identity Challenge

European Electronic identity methods have become the gold standard for verification across Europe, offering advantages over traditional methods by verifying customer identity online without compromising user experience.

Whilst EIDAS provides an over-arching framework, local identity requirements are still somewhat independent of other EU states.

This further creates considerable obstacles for UK fintechs with international ambitions, in particular the identity solutions you might be using in the UK today may not be acceptable for certain EU markets and transaction types.

FundingPartner, a crowdlending platform connecting small businesses with investors, discovered this firsthand when expanding from Norway into Sweden and Denmark.

Despite similarities in language and culture, they encountered what CEO Geir Atle Bore described as a “bureaucracy tsunami” of different identity verification systems.

“There are so many strange codes, technological quirks, paperwork, various rules and ways,” Geir explains.

"We needed to figure out how to integrate our platform into completely different technological systems in each country.” This complexity not only delayed their expansion but also impacted revenue and growth – critical factors for any fintech startup.

The UK Fintech Compliance Reality

Many UK fintechs today rely on document-based verification methods or Identity Bureau checks for compliance. While these approaches may suffice for domestic operations, they fall short when expanding into European markets where customers expect – and regulations often require – more sophisticated identity verification.

According to Riten Gohil, Digital Identity, Fraud and AML evangelist at Signicat, “UK fintechs often underestimate the complexity of the European identity landscape. What works in London doesn't necessarily translate to Stockholm, Paris or Berlin.

Each market has its own localised verification methods, regulatory oversight and customer expectations, meaning a one-size-fits-all approach does not work and as such, can actually hinder growth and compliance”.

Signicat’s Unified Solution

Signicat’s eID Hub addresses these challenges by providing a single integration point for over 35 European eIDs. This comprehensive approach enables fintechs to streamline compliance with KYC, AML and GDPR regulations through a unified verification process while enhancing security and customer experience.

The platform’s international scalability has proven valuable for companies like If Insurance, the Nordic region's largest non-life insurer.

When expanding into the Baltic states, it extended its partnership with Signicat to include authentication solutions in Estonia, Lithuania and Latvia.

“Signicat has been our trust service provider since 2009, and it was a natural choice for the Baltics since reliability and coverage of services are important for us and our customers,” says Mihails Galuška, If's Identity and Access Management Global Product Manager.

“Since using Signicat’s authentication services, we have increased our customer engagement and satisfaction score and gained millions of digital touchpoints, enabling better data and insights into customer needs.”

The Customer Experience Advantage

Beyond compliance benefits, European eIDs offer significant customer experience advantages that UK fintechs can't afford to ignore. European consumers are already familiar with their national digital identity systems – they use them regularly for everything from online banking to accessing government services or food delivery.

These eID systems are typically already installed on customers’ smartphones or easily accessible through their preferred browsers. This means faster, more convenient onboarding steps compared to traditional document verification processes that can take minutes or even hours to complete, with the potential for abandonment.

As Riten notes, leveraging local eID systems means not just meeting compliance requirements but actually speaking the customer’s language. A Swedish customer expects to use BankID, an Italian customer expects SPID. By supporting these familiar systems, UK fintechs can significantly reduce onboarding friction and increase conversion rates.

Evolving Identity Verification

Signicat goes beyond basic identity verification, offering end-to-end orchestration solutions through a single API. Its RiskFlow platform helps financial institutions seamlessly onboard customers while minimising fraud risk by accessing critical KYC, KYB, and AML data from over 200 data sources, including access to the eID hub describe above.

ClearBank is setting its sights on driving European expansion, and digital identities (eIDs) are central to these ambitions. The bank is actively collaborating with Signicat to leverage their expertise in seamless and secure identity solutions across borders.

“With Signicat, we see an opportunity to simplify and secure customer interactions during onboarding. Their advanced eID technology ensures a consistent, compliant experience tailored to the needs of our customers,” explains Phil Rivers, Chief Operating Officer at ClearBank.

For institutions like ClearBank, the message is clear: growth in international markets demands scalable, robust eID solutions. With the right partner, rapid expansion across any country becomes a seamless reality.

Strategic Advantage for UK Fintechs

For UK fintechs eyeing European expansion, implementing a unified identity verification solution from the start offers significant advantages.

Rather than developing separate systems for each country, companies can focus on core business activities while confidently entering new markets.

As FundingPartner’s experience demonstrates, handling different ID systems across multiple countries is "such a big task that businesses of all sizes are better off leaving it to a full-time service provider."

Its advice for startups with international ambitions? “If you have plans on expanding into new countries, it would be smart to use Signicat's solutions from day one.”

Ready to Expand Across Europe?

With digital identity becoming increasingly central to financial services, UK fintechs can gain a competitive edge by partnering with established providers like Signicat.

The result is faster market entry, stronger security, better customer experiences and the agility to adapt to Europe’s shifting identity landscape.

Don't let identity verification complexity slow your European expansion. Contact Riten Gohil, Digital Identity, Frayd and AML Evangelsit to discover how Signicat's eID Hub and potentially the RiskFlow Identity Orchestration platform can streamline and future-proof your compliance requirements and enhance customer experience across 35+ European markets.