Fintechs Must Adapt as Digital Wallets Reshape Identity Landscape
The digital identity landscape is shifting. Fintechs must adapt as digital wallets expand their capabilities, simplifying onboarding and changing how users prove their identity.
Expanded digital IDs, stored in wallets like Apple and Google's, allow users to share structured, verified identity attributes directly. This replaces manual processes like Optical Character Recognition (OCR) for extracting data from physical documents. Fintechs should prepare by integrating support for these credentials, reviewing Strong Customer Authentication (SCA) implementation, and exploring partnerships with issuers.
Digital wallets now include a range of verified documents, such as bank account ownership records, tax returns, and income statements. This expansion will transform onboarding, Know Your Customer (KYC), authentication, and even payments in fintech. Google enabled Android phones in the UK and US to store digital passports in Google Wallet, ahead of Apple's delayed plan to add passports to Apple Wallet with iOS 26. As digital identity grows, reliance on live selfies during onboarding may decrease, but they may still be used in high-security cases. Fintechs should design for granular consent, stay policy-aware, and play by the rules to ensure technical readiness.
Digital wallets are reshaping fintech. Fintechs must integrate digital ID support, review SCA, and explore partnerships. With expanded document types and reduced reliance on live selfies, onboarding, KYC, and authentication will change. Fintechs should stay informed, adapt, and ensure compliance to thrive in this evolving landscape.
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