The Study on Nordic-Baltic Trust Services, which analysed the digital identification mechanisms used in eight Nordic and Baltic countries, revealed that there are still numerous barriers to cross-border digital services despite the legal and political frameworks established to facilitate their take-up.
„The most significant difference between countries is in the nature and application of electronic identity solutions. As a result, the readiness to offer authentication services, and the requirements for secure authentication vary greatly across countries,“ commented Andres Kütt, Head of Technology at Proud Engineers. Although the EU regulation on electronic identification, authentication, and trust services for electronic transactions (eIDAS) applies in all Nordic and Baltic countries included in the study, there are significant variations in practical implementation. „These countries have adopted divergent stances as to what is deemed sufficient for declarations of intent in an electronic environment. Some countries accept simple authentication, whereas other countries demand electronic signatures,“ said Kütt.
According to Laura Kask, the CEO of Proud Engineers and one of the authors of the study, the current usage of cross-border digital services in the Nordic and Baltic countries remains low, and there are also not that many of them to begin with. Furthermore, international agreements facilitating cross-border electronic identity authentication require not only a consensus in technical and procedural matters but also a thorough understanding of cultural backgrounds. „Although the European Union has set up a legal framework that enables its citizens who want to use cross-border digital services to identify themselves and declare their intent in an electronic environment in the same manner as in their homelands, there are still only a few working examples,“ commented Kask.
The free movement of people and services is gathering importance around the world. „Today, cross-border employment, location-independent entrepreneurship, and study mobility are global trends, and the capacity of individual countries to address these issues is affecting growing numbers of people,“ said Kask. She added that both private and public sector experts interviewed for the survey foresee a surge in demand for cross-border digital services, especially in areas related to education, business or work. „In an open world, it is important to ensure that people can authenticate themselves in a convenient manner when using digital services. It is just a matter of time until it becomes an essential element of digital hygiene,“ said Kask.
The Nordic-Baltic region offers an attractive business environment that is best characterised by transparency, agility and innovation. As such, it is particularly attractive to global startups that are interested in setting up their branch offices and recruiting local experts to bring in added value. Furthermore, the Nordic-Baltic region has also proven to be fertile breeding ground for startups that are making increasing contributions to local economies.
According to Andres Kütt, one of the most important stages in the lifecycle of startup companies is scaling, i.e. the phase when the product or service is launched to new markets and consumer groups. “To that end, the main prerequisite for success is an easy and convenient setup for digital cross-border transactions. Currently, the level of e-authentication varies greatly across the EU Member States, leaving many startups, as well as other companies, in need of a uniform solution for identifying their users and concluding contracts online. In addition, the national requirements established for companies to ensure the security of e-authentication also vary across the board. In order to maintain their competitive advantage and conducive business environment for innovative solutions, the Nordic-Baltic countries must find a uniform solution to facilitate convenient e-authentication across borders. Otherwise, both local entrepreneurs, as well as international companies, may take their business elsewhere, to other markets that are not encumbered by such barriers to business development,” said Kütt.
The Study on Nordic-Baltic Trust Services was commissioned by the Norwegian Digitalisation Agency and carried out under the auspices of the Nordic Council of Ministers. The study focused on eight countries: Estonia, Latvia, Lithuania, Finland, Sweden, Denmark, Norway, and Iceland. It provides an overview of national electronic identity solutions and trust services (e.g. electronic signature) used in domestic and cross-border communication. Additionally, the authors analysed the legal environment and the market situation. This study provides the Nordic Council of Ministers with a comprehensive overview of relevant regional developments, and a strong knowledge base for future decision-making with a view to improving cross-border digital communication.