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EBA Reveals Final Date to Comply with Remote Customer Onboarding Regulations

28 September, 2023

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The European Banking Authority (EBA) issued its guidelines on 22nd November 2022, to rely on remotely based onboarding solutions under Article 31(1). These guidelines will be implemented in the financial institutes from 2nd October 2023.

The EBA designed these guidelines to uphold the EU standards in developing and implementing the safety, risk-associated with the initial enhanced due diligence (EDD) process while onboarding customers and businesses through remote verification solutions. The European Commission ordered EBA to create rigorous measures on the applications for anti-money laundering (AML) and counter-financing terrorism(CFT), where the customers can onboard remotely through applications, websites, or online institutes.

Demand for digital onboarding increased during COVID-19. As the demand for fintech increased, remote customer verification proliferated promptly, unfortunately, as well as cyber crimes such as money laundering and terrorist financing. These guidelines ensure that the remote customer and business onboarding aligns with AML regulations and data protection. They also seek to common the use of remote onboarding applications by protecting the technology neutrality and not endorsing the latest robust inventions in AML compliance. Furthermore, these guidelines enhance the adoption of new technologies to support the remote onboarding process.

These guidelines have four clear aims, including steps financial institutions should take before choosing digital onboarding tools, not totally depending on the verification tool, ensuring the relying tool is adequate and reliable, and constantly cross-checking the tool to comply with the latest AML measures. These latest obligations will affect all the financial institutes that rely on the remote business and customer verification process. To comply with the regulation, banks are also considering shifting their customer from face-to-face to online onboarding.

Suggested Reads:

Spotify Becomes the Hub of Money Laundering for Scammers in Sweden

CFTC Crackdown on DeFi Platforms for Noncompliance with Trading Regulations

Citigroup Agrees to Pay $2.9m Fine on Shortcomings in Record-Keeping Regulations

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