Remote Customer Onboarding – Digital Onboarding

Law No. 7247 Amending Certain Laws and Decree-Laws (the "Law"), published in Official Gazette No. 31167 of 26 June 2020, has entered into force. With this development, the requirement for financial service providers to carry out the "Identity Verification" and "Contract" steps of customer onboarding physically has been removed.

With the Regulation on Remote Identity Verification Methods to Be Used by Banks and the Establishment of Contractual Relationships in Electronic Environments (the "Regulation"), published by the Banking Regulation and Supervision Agency ("BRSA") on 01.04.2021, the details of the remote identity verification methods that banks may use to acquire new customers and verify customer identity were set out.

The new Law and Regulation have paved the way for remote identity verification that can replace the written form, without prejudice to MASAK requirements and secondary obligations. In addition, financial inclusion and customer numbers are expected to increase for institutions within the scope of the Law. Moreover, not only banks but also fintechs and financial institutions are able to use digital solutions for the specified types of contracts.

Amendments have also been made to a number of important laws to enable remote identity verification by payment service providers, brokerage firms and portfolio management companies:

• Banking Law No. 5411
• Law No. 5464 on Bank Cards and Credit Cards
• Law No. 6361 on Financial Leasing, Factoring and Financing Companies
• Law No. 6493 on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions

Requirements for the remote identity verification process

Banks are expected to remedy any deficiencies in their remote identity verification process by 1 May 2021 and to design their processes according to the requirements set out in the Regulation, together with Article 34 of the Regulation on Information Systems and Electronic Banking Services:

• General principles to be observed before starting the process
• The customer representative who will carry out remote identity verification and the working environment
• General principles to be observed when starting the process
• Identity documents that may be used and their verification
• Verification of the person whose identity is to be verified
• Ending the process during the video call
• Recording and retaining data
• Responsibility in remote identity verification
• Establishing the contractual relationship after identity verification

Our digital transformation support services cover current-state analysis, improvement work and audit stages in line with secondary regulations within the scope of remote customer onboarding as defined in the Law.

Current-state analysis

A current-state analysis is carried out by assessing the institution's compliance with the provisions of the legislation.

Improvement work

A roadmap is presented for the processes and findings identified in the compliance assessment, and digitalisation work is carried out on the processes using the identity verification methods selected.

Audit

An audit assessing compliance with the rules and principles of the Law and the secondary regulations is carried out and an audit report is issued.