Banks will be required to provide remote servicing of new clients using biometrics

Russian systemically important banks will be required to provide remote servicing of new clients using biometrics both in the mobile application and in online banking. The remaining universal banks will have the right to choose one of these channels. This will allow banks to reduce unnecessary costs for unnecessary development of services, experts say.

On February 22, the Russian government introduced to the State Duma bill, which adjusts banks’ obligations under the rules for remote customer service. In particular, amendments are provided to Art. 7 (“Rights and obligations of organizations carrying out transactions with funds or other property”) of the AML/CFT law (115-FZ). According to them, after identifying the client, systemically important banks (currently 13 credit institutions) should be able to issue loans and open deposits remotely both through the website and through the mobile application. Other banks with a universal license will have a choice between these two channels.

The previous version of this paragraph did not include the ability for banks with a universal license (224 credit institutions in total) to select one of the channels. In addition, previously there was no reservation that this was relevant for those banks that are generally engaged in providing such retail services (issuing loans and opening deposits); all banks with a universal license were obliged to implement this, market participants explain.

Vice-President of the Association of Banks of Russia (ADB) Alexei Voylukov believes that such changes to 115-FZ “will simplify the task for more than 200 banks, reducing the unnecessary burden for them, giving them the opportunity to independently determine which channel of communication with their clients is of primary importance and more.” used by the latter, for the ability to embed biometric solutions only in it.” According to him, ADB “has repeatedly advocated this in order to enable financial sector participants themselves to determine where to implement the implementation of the EBS, so as not to generate unnecessary costs, which may ultimately fall on the shoulders of consumers.”

According to the Chairman of the National Council of the Financial Market (NCFM) Andrey Emelin, the market has been waiting for this bill for a long time, “since the previous edition provided that all banks must prepare the infrastructure to serve citizens with biometrics, even if banks do not plan to provide such services in general They don’t work with citizens.” The new bill clearly states that only a bank with a universal license and only in the case of providing biometrics services must prepare the appropriate infrastructure, he explains.

It is unclear to what extent banks are willing to massively implement remote services simultaneously through a website and an application, but some large banks have already implemented such services either completely or in at least one of the service channels. PSB clarified that back in 2019 they were among the first to introduce remote identification, which allows you to receive a full range of services in mobile and online banking. “A citizen who has a confirmed account on State Services and has submitted biometrics to the Unified Biometric System can become a bank client remotely, without visiting the office,” PSB explains. Such clients can now open accounts and deposits, apply for loans and use other banking products and services in remote channels “on the same basis as clients whose identity was confirmed by a bank employee during a face-to-face meeting.” Sovcombank only clarified that “customers who have passed identification can now remotely apply for loans and deposits in the mobile application.” Other banks did not promptly respond to Kommersant’s request.

The Central Bank explained that the proposed changes take into account “the specifics of various business models of credit institutions.”

In particular, a number of banks do not use all possible channels of interaction with clients, but only one of them. In addition, the use of an enhanced unqualified electronic signature (UNEP) along with a simple electronic signature (SES) makes it possible to create conditions for the development of company information systems. Including, it will expand the list of ways to sign documents, the Central Bank noted.

To implement such technologies, banks will inevitably have to spend money. However, as VisionLabs CEO Dmitry Markov notes, the cost of implementing these security tools for the mobile or web channel is approximately the same, so in general, the launch of such remote services depends on how the bank’s KYC processes (“know your customer”) are organized. It consists of the costs of developing and supporting applications, information security tools, customer identification processes and additional security measures in the form of facial biometrics, the expert explains.

Olga Sherunkova, Maxim Builov