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Financial intermediaries : online identification

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Since 18 March 2016 FINMA allows to establish a business relationship between financial intermediaries and customers by video transmission. Explanations.

Which regulation allows the financial intermediaries to online identification?

It’s the regulation 2016/7«Identification par vidéo et en ligne» / «Video- und Online- Identifizierung » that authorizes the financial intermediaries to set commercial relations with customers by video transmission.

It allows online business relationships. Then a financial intermediary can initiate a commercial relation with a client just by video. This means that FINMA assigns the same value to an online identification than a physical meeting of contractual partners.

Why does FINMA allow the online identification?

To keep up with technological advances, FINMA decided to permit the online identification. Indeed, the financial intermediaries communicate with customers via internet.

This regulation facilitates the establishment of business relationships between financial intermediaries and their customers.

How does it work?

We can take the example of UBS, the first bank that allows the opening of bank account with online identification. The customer just needs to download a smartphone application.

With the smartphone application it’s possible to open a bank account from Monday to Friday from 8 :00 AM to 10 :00 PM and on Satuardy from 9 :00 AM to 5 :00 PM. The customer chooses a banking product and gives its personal data. The identification achieves by a video interview between the client and a UBS customer service representative. If the interview is successful, the client receives the contractual documents by encrypted e-mail. He must print, sign and return the documents by regular mail.

Other banks are preparing to offer this service. Some have the ambition to offer a completely digital solution that doesn’t require customers to send a signature by regular mail.

What are the benefits of this system?

For the financial intermediaries, it’s a solution that meets the needs of clients. Indeed, the request for digitally services are becoming more important.

For the clients, this system facilitates the opening of a bank account. They benefit of an extension of opening hours and of high securities procedures.

Article written from the team of Multicrédit.