Developments related to digitalization take up more space in our lives every day, ways of doing business are changing, and many activities are moving to the electronic environment, saving time, speed and cost.
Especially with the pandemic, the variety and pace of digitalization and remote ways of working have increased even further. It is an undeniable fact that, beyond having become a necessity during the pandemic, digitalization will take an even bigger place in our lives because it contributes to efficiency, convenience and reduced bureaucracy.
Many banks already have customer acquisition processes through digital channels, but because a wet-signed contract was mandatory, one leg of the process that started digitally (sending the contract to the customer by courier and collecting the wet signature) unfortunately had to be carried out manually.
With the 'Regulation on Information Systems of Banks and Electronic Banking Services', it became possible for customers to apply from where they sit, to become customers without a wet signature, and to apply for other products. In this way, banks/institutions that can offer digital banking services faster, more comfortably and in greater variety will stand a step ahead.
So how will banks/financial institutions verify the customer in the digital environment?
First of all, it is worth explaining the concept of digital identity at this point.
Digital identity is the process of enabling the person making an application to be recognized in the electronic environment through various checks.
Let's look together at what the identification methods could be:
- verification of documents uploaded by the customer with document recognition technology,
- checking biometric data (fingerprint, voice recognition, face recognition, etc.)
- verification of the uploaded photograph with face recognition technology,
- checks made through connections established with various systems (social analytics)
The methods that can be used for verification can be grouped under 3 headings.
- A factor known by the person (for example, a secret word)
- A factor possessed by the person (for example, an SMS sent to the customer, card password, card number)
- A factor that is a biometric characteristic of the person (for example, fingerprint, voice recognition, face recognition)
So what information about the person does the Republic of Turkey Identity Card provide?
The Republic of Turkey Identity Card holds information that can be used as a digital identity. The identity card contains biometric data and technically has the infrastructure on which electronic signature data can be written. Remote identity verification and transactions can be carried out by sharing over the internet the data (e-signature) verified using card readers certified under the certification service offered by TUBITAK.
The statement in Article 43 of the 'Regulation on Information Systems of Banks and Electronic Banking Services' is below.
So what does the remote identity verification and reliance on third parties article in the relevant regulation contain?
ARTICLE 43 – (1) Without prejudice to the obligations set out in the Law No. 5549 on Prevention of Laundering Proceeds of Crime, dated 11/10/2006, and its secondary legislation, a bank may use remote identity verification methods to identify the customer or the person acting on behalf of the customer, or may receive service through open banking services from another bank that has previously carried out identification for the customer or the person acting on behalf of the customer. The Board is authorized to determine the procedures and principles for the implementation of this paragraph.
What will this article make possible?
- Because customers can easily become customers of any bank or institution they wish from where they sit, it creates an opportunity for customers to register with the systems and see their advantages.
- Because the documents and information customers enter in the digital environment can be used for more than 1 application, it frees customers and banks from physical paperwork and procedures.
- The number of Fintech companies engaged in open banking and of products that serve customers and increase their convenience will grow.
In short, this regulation, which opens the way to many opportunities in digitalization and reaching customers, will increase customer comfort and satisfaction; as many operational steps move to the digital space, it will make a significant contribution to speeding up processes and reducing costs.
You can find details about the Regulation on Information Systems of Banks and Electronic Banking Services at the link below.
