The digital identity wallet and decentralized identity solutions are gaining traction and growing interest. The Web of Trust states that over half of the world is working towards decentralized identity solutions. That's impressive! Gartner estimates that by the end of 2026, we will have 500M wallets! This is going to be driven by the national wallet strategies, spearheaded by the EU Digital Identity Wallet (EUDIW). And that smells like momentum!
Both of these tell me, that organizations will be are ready to be expanding from platforms to digital ecosystems soon! Once the core capabilities like wallets, issuers and verifier systems are implemented, the same organizations want to reap the value potential these capabilities offer.
The wallet potential requires realization
Even though the potential impact of the wallet & credential exchange paradigm is huge, the reality is that the wallet ecosystem not simple to realize. The reason why it’s not simple, lies in its decentralized nature. In the wallet value chain, the creation of value potential is separated from the realization of the value. This means that use cases may hold huge value potential, but remain unrealized. A value chain with huge potential does not yet produce value.
The key then is the ability to connect the wallet value chain with the value-realizing business and ecosystem value chains.
No matter how many credentials a wallet contains, their value is realized only within a business value chain. The more the core business can utilize the wallet capabilities, the more it can squeeze out value from the use of wallets. This is evident for businesses where their core need revolves around identification in multiple countries. Previously they have needed to find partners that can integrate different identity providers in different market areas. Now, the EUDI Wallet ecosystem will handle this.
The EUDI Wallet creates a harmonized cross-border identity verification capability. Businesses who can leverage that will see quick returns! However, the real value multiplier is in the reusability of the wallets and credentials in multiple ecosystems.
It's not about the killer use case, but the killer strategy.
Wallets and decentralized identity needs to be thought more like websites and APIs, and less like services and platforms. Websites and APIs are utilities which hold tremendous value, but only to those who know how to utilize them as part of their business properly. An API is not useful if nobody is interested in your data. An e-commerce website is a waste of money, if you don't have a product and a customer base willing to buy from you.
We need to move from the killer wallet use case to the killer wallet strategy!
We're stuck on talking about the "killer use case for wallets". What's the killer use case for websites or APIs? Utilities by themselves produce value when integrated into your business value chain. And the killer strategy is about how you use your new found capabilities to create advantage over your competitors.
We're on the verge of a strategic landscape change
The adoption of wallets is real. There's no going around it. Even in it's most rudimentary form, the EUDI Wallets will enable a harmonized identification capability to its 400M+ citizens, which in itself is already a huge change for businesses. What kind of opportunity ripples this wave creates, is up to the businesses. However, it's clear that the landscape is changing and it will create strategic opportunities for those businesses that want to leverage it. We are already seeing businesses making moves by acquiring wallet development companies to strengthen their position.
Business strategy is the long-term plan a company uses to achieve competitive advantage, maximize value, and sustain growth by aligning resources, market positioning, and operational efficiency. Your wallet and identity strategy should then steer how your business can leverage the new strategic shift to increase your operational efficiency, strengthen your existing customer relationships, reach new markets, find new revenue streams, etc.
Those businesses who can understand the strategic shift, must also define the ecosystem strategy. The wave of wallets will also mean that businesses need to evaluate in which ecosystems they wish to participate in. The value of the credential (and other wallet capabilities) will be strongly tied with the ecosystems and rulebooks that govern their use.
Start defining your strategies
Digital identities will be able to bridge gaps and reach areas that previously were unattainable. Digital ecosystems will expand your reach by combining the capabilities of a network to solve challenges too complex for one business.
You should be exploring and defining your wallet strategy. How will your business leverage wallets, and which ecosystems will multiply the value you can attain?
Veridient is your partner in defining your strategy for digital identity and digital ecosystems. Be sure to book a meeting and let's start the discussion!
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