
Insights Into Austria’s Biometric KYC Onboarding [2022 Updates]

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Biometric authentication is considered a convenient approach for onboarding online customers that is completed entirely or partially by automated electronic procedures without the intervention of a human. This means that, unlike video identification, a natural person will no longer be required to be present during the onboarding process. Businesses can expect that the new biometric identification technology will make operations smooth, easier and faster. In comparison to conventional remote identification processes, it should also help save money.
The use of biometric KYC procedures is contingent on a number of factors, including the use of cutting-edge, constantly updated biometric techniques, proper security measures, thorough documentation of customer information and maintaining records of the verification results. In compliance with Austria’s current data protection regulations, businesses need to implement the biometric verification procedure.
Biometric technology has been permitted for online client onboarding in Austria since 2021. Let’s take a look at what this means for businesses operating in Austria. Despite being located in one of Europe’s most crucial financial centers, Austrian businesses took a long time to onboard consumers manually. This was a concern because traditional Know Your Customer (KYC) methods were time-consuming, error-prone, and necessitated a significant investment of both financial and human resources.
The Austrian Financial Market Authority (FMA) made video-based identification for onboarding new clients mandatory for financial as well other businesses on January 3rd, 2017, as it was the country’s first move toward digitization. This assisted financial institutions particularly banks to onboard clients remotely by authenticating their identities through video chat.
However, the Austrian Financial Market Authority (FMA) has also issued an amendment to the Austrian Online Identification Regulation (“Online-Identifikationsverordnung“) in November 2021, allowing fully automated biometric procedures for identity verification under the Austrian Anti-Money Laundering Act (Finanzmarkt-Geldwäschegesetz). This means that banks, financial institutions, and other companies subject to AML legislation can now use biometric identity verification in addition to other methods of identification.
In the context of the amendments, the FMA’s legal provision on Online Identification Regulation describes the following terms:
Customers need to be onboarded by financial service providers via operator-assisted video identification. Financial service providers can now integrate fully automated biometric verification solutions for online identity verification without requiring the need of human involvement.
The biometric identification method, according to the modifications, includes a presence check, a multi-step customer verification process that includes a liveness check, collecting government-issued identity documents embedded with NFC chip data instead of taking pictures and agreement to biometric data processing. Furthermore, the procedure must be technologically advanced and adhere to the same security standards as “in-person” identification.
Only NFC-based identity documents issued by the government can be used for biometric verification. Instead of images of the ID, data from such ID documents are to be retrieved using NFC readers. In addition to the data recording, the FMA still recommends storing electronic copies of the front and back of IDs.
In addition to this, from January 1st, 2023, all financial firms operating in Austria are required to validate the electronic signature’s legitimacy as well as the data’s integrity from NFC-based documents.
Under Article 9 (2) a) of the EU GDPR, if financial institutions need to use customers’ biometric information to fulfill KYC verification procedures, they must get consent from the customers and seek their agreement to the use of biometric data legally.
For businesses, there are a few crucial points to keep in mind in order to stay put with Austria’s biometric identification requirements. Financial service providers are obliged to perform the following to onboard consumers online using biometrics in accordance with the FMA’s online identification regulation:
Biometric authentication is one of the best ways to combat financial crimes, especially 2D and 3D masks, and deep fakes. Skin texture analysis, 3D mapping, depth sensing, liveness detection, and other techniques have enhanced the accuracy of biometric authentication.
Shufti Pro’s state-of-the-art facial biometric verification solution is powered by thousands of AI models to authenticate customer identities and verify the live presence of the customer, helping businesses to meet Austria’s new identity verification requirements. With 98.67% accuracy, our solutions ensure that your company stays safe from facial spoof attacks.
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