The Federal Ministry of Finance intends to further develop the existing legal basis for the use of video identification with a new ordinance. Essentially, the requirements for the use of the video identification procedure from BaFin Circular RS 3/2017 are to be transferred to the text of the ordinance and current security-specific findings are to be taken into account.
The draft stipulates that for all video identification procedures, there must always be the option of identifying oneself using the online ID function (eID) as an alternative. This can help to increase acceptance of the online ID function, which could also support the introduction of the planned European EUDI wallet by making the necessary adjustments to workflows in the financial sector.
We have summarized the specific changes, what this means for you and why customers of our ID Wallet are already well positioned below.
An overview of the changes and a brief classification
- The regulations represent a novelty with regard to the possibility of using semi-automated video identification for money laundering-compliant identification. In addition, the current draft regulation provides for the testing of fully automated technologies in consultation with the German Federal Office for Information Security (BSI), in which – in contrast to the semi-automated procedures – a human is no longer required to be involved in the process.
- The legislator wants to make it mandatory that, if video identification is offered, the user should also have the option of identifying themselves using an eID. In this way, the intention is to further advance the spread of eID, which has hardly progressed so far, and thus possibly prepare for the later mandatory acceptance of EUDI wallets. The onboarding and backend processes would already have to be adapted for the processing of digital identity data.
- In addition, the technical requirements for video identification are being revised. Some regulations harbor the risk that video identification would be de facto impossible if viewed strictly, which is why an intensive discussion of the key points is currently taking place. We assume that the text of the regulation is still in a state of flux on these points and that one or two changes will be incorporated before the regulation comes into force.
What does this mean for companies?
For all those who have to carry out AMLA-compliant identifications, for example for the purpose of know-your-customer (KYC) checks, and use video identification, there will be a need for action at the latest when the regulation comes into force:
- It must be ensured that the video ID service provider used meets the technical and security-specific requirements of the then final regulation.
- Anyone who uses video identification in the aforementioned context must ensure that, in addition to video identification, the customer also has the option of identification via eID.
KEEP CALM and STAY COMPLIANT – the Verimi ID wallet as a comprehensive solution
Our Verimi partners and all those who want to become Verimi partners are well positioned for the future.
As a BaFin-licensed payment institution, for example, you do not need to worry about the extensive contractual regulations that are legally required for outsourcing to other suitable persons or companies. These do not apply to Verimi due to BaFin licensing.
Via the Verimi platform, we offer procedures for secure and customer-oriented identity verification, in particular we enable
- Automated and AI-supported identity checks;
- completely digital identification procedures, e.g. as identification from online banking;
- classic AMLA-compliant identification procedures, e.g. via video or on-site;
- identification with the online ID card (eID); and
- the simple reuse of previous identifications (wallet ident).
With Wallet-Ident in particular, we offer our partners and their customers an effective solution for carrying out KYC processes in a cost-efficient, convenient and time-efficient manner.
Video identification can also be carried out via our Verimi Ident Hub, whereby we ensure for our partners that the solutions offered are always in line with the applicable requirements.
Regardless of whether the requirement for alternative identification via eID under the regulation ultimately comes or not, our partners are equipped for the future and can easily obtain a suitable solution for them via our Ident Hub, true to the motto:
One partner for everything.
Outlook
As digitalization progresses, your customers’ expectations of uncomplicated KYC/onboarding processes will increase.
High security and reliability of services are becoming an increasingly important success factor in the digital world. Companies should therefore already be considering which digital identity checks are the perfect fit for their products.
New ID solutions can be integrated easily, quickly and directly into your digital KYC/onboarding processes thanks to our standardized interface architecture. This allows you to offer your customers a convenient choice for the required identification, regardless of the specific regulation that comes into force in the future.
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