Minister of Finance Sven Sester has signed a regulation that will allow banks to open current accounts for Estonian residents and e-residents without the need for the customer to visit a bank branch.
“We will make opening a bank account easier and faster for everyone, including e-residents,” said Minister of Finance Sven Sester. “We want to make things more convenient, but also maintain the security necessary in the financial sector. The IT solutions that make it possible to identify people from a distance have existed for some time. Allowing for them to be used when bank accounts are opened certainly makes sense.
The financial sector will be able to offer e-residents with new and more convenient services. “There is no doubt that e-residents will help bring more investments and jobs to Estonia,” added Sester. “I want to thank market participants for efficient co-operation in developing the most modern and secure principles.”
The purpose of the regulation is to establish specifying standards on the basis of the amendments to the Money Laundering and Terrorist Financing Prevention Act adopted by the Riigikogu in June. According to the amendments, identifying a person with IT tools is equal to identifying them by being at the same location as the person or their representative if certain conditions are met.
The requirements for the identification and verification of people with IT tools, which are set forth in the regulation, help implement a common standard for all service providers. When the standards enter into force, it will be possible for banks and other financial institutions to identify people without being at the same location as the person or their representative. This must be done with IT tools that allow for the process to be recorded and replayed. This will create a situation on the market where the new identification and verification regime is a preventive measure and helps keep away potential offenders.
It will be possible to use a real time video bridge for identification and verification of a person, which makes it possible to compare the image of a person’s face with the data of their identification document and the data of the Police and Border Guard Board. The person will also be interviewed via the video bridge, which will help ascertain the client’s risk profile: assess their background, the origin of their financial resources and the purpose of establishing a business relationship. The entire process is recorded and the recording is preserved.
Earlier regulation required people taking part in a transaction or using a service to be identified by being at the same location as the person or their representative. If all conditions are met, identifying a person with IT tools is equivalent to the identification of a person by being at the same place as them. In the case of monitoring a business relationship, for example, the new and information technological solution is an even stronger measure than being at the same location as the person or their representative.
Banks will retain the right to identify a person by being at the same location as them. It will be up to the service provider to decide whether they want to open accounts for clients or conclude transactions with them using information technology tools. The service is meant for everyone who holds an Estonian ID card, digital ID or e-resident’s card.
Source: Estonian Ministry of Finance
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