Nearly two years ago, the Swiss Financial Market Supervisory Authority (FINMA) established a new set of rules that reflected advancements in digitalization by allowing online and video identification. Financial institutions in Switzerland, especially those in the retail banking segment, took FINMA's big move into the Digital Age as a chance to introduce self-service account opening to their clients.
FINMA itself has described its experience with digital identification in the past two years as positive. But as technology has advanced and new risks of misuse have emerged, it's chosen to revise its due diligence requirements for client onboarding via digital channels.
The Main Changes:
Video identification: using a single-use password (TAN) is out and verification of three randomly chosen visual security features of identification documents is in
Online identification: transfers from FATF member state banks are also allowed, instead of only from Swiss banks. Plus, liveness detection is now required when checking photographs
Because technology will continue to evolve and new risks will develop, banks should expect further revisions of these rules in the future and be prepared to adapt their onboarding applications. Like we've talked about before, neither the customer or the bank benefit from isolated self-service account opening services for each product, line of business, or channel.
1. Banks should view client onboarding as much more than a customer identification process
2. Client onboarding should cover all necessary steps right up to the moment the customer gains full access to their new account
3. Banks should operate client onboarding as a part of the entire customer journey. Customers will be confused if they have different onboarding experiences with different touch points, channels, products, and services; the onboarding experience should be cohesive.
By approaching onboarding holistically, banks can put in place regulatory changes-like the new FINMA requirements-once instead of painstakingly implementing them for each and every bank account opening application they offer.
Credit Suisse, for example, uses its new client relationship onboarding service to support onboarding scenarios across channels (self-service and branch), for different products and product packages (Bonviva, Digipigi), and also across industry segments (retail, private, corporate), all with one onboarding infrastructure. And Banque Cantonale de Genève launched Avantage Service, which allows clients to open a bank account, apply for an individual pension plan, and get a property financing proposal with a single online procedure.
The onboarding process should be as flexible as possible, so that the customer, bank, and regulator are all getting what they require. When it comes to customer identification specifically, banks can then choose what best serves their customer base while also reflecting the conditions of their products and services.