2020 was the year of total implementation of the KYC (KnowYourClient) procedure into the financial system of Ukraine. The process of identification and verification of clients before establishing any business relationship with them is important for financial institutions in the context of financial monitoring, above all since the entry into force of the Law of Ukraine “On measures to prevent and counteract money laundering, terrorist financing and financing of proliferation of weapons of mass destruction” and the implementation of a number of other regulatory documents, which establishes the procedure for identification and verification of clients. The amount of necessary information and the list of documents required from the client are determined.
Among the innovations of the Law there is also the standardization of remote client verification procedure. The identification of the client could be performed by the financial institution remotely (for example, for the regular client of the financial institution), at the same time, the condition for verification was the personal presence of the client during this procedure performed by an employee of the financial institution. This rule is not mandatory now. Moreover, photo-fixation of clients of banks and other financial institutions is clearly defined as one of the mechanisms of remote verification.
Standardization of mechanisms for remote identification and verification of clients is perhaps the most expected rule of the financial market. After all, these innovations not only optimize business processes and significantly accelerate their implementation, but also minimize personal contacts between clients and employees of the financial institution, which is useful to prevent any acts of corruption and is of particular importance during Covid-19 pandemic or in other situations where social distance needs to be maintained.
Banks and non-bank financial institutions, especially insurance companies looking for digital solutions for remote client verification, should pay attention to the Object Control software product, the algorithm of which provides for the possibility of remote verification of the client using photo or video-fixation. Moreover, documents generated in Object Control can be immediately signed by the client and the representative of the financial institution using a qualified electronic signature (QES). Documents generated and signed in this way shall be proper performance of requirements in the field of financial monitoring. They will have legal force and can be used in court as evidence in case of disputes.
Object Control is an easy-to-use software product, the implementation of which in the financial institution will make it easier to interact with clients and address financial monitoring issues.
It is especially convenient and fast to use Object Control for insurance companies’ sellers working off-premises, because they will be able not only to identify and verify the client, but also to make car or real estate inspection report, etc., to conclude an insurance contract. All generated documents can be signed immediately, and the passport and identification code can be certified by the seller and the client using QES, SMS or touch signature and then sent to the e-mail of the client and the server of the insurance company.
For a detailed analysis of legislative innovations on remote client verification, read the Evergreen Partner’s article “Remote Client Verification: New Rules for Banks and Non-Bank Institutions”.
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