Chairman of the Board of the All-Ukrainian Association of Financial Companies
The share of cashless payments and the number of online purchases has increased significantly. The legal framework is responsible for the changes in the market, but it is very difficult to take into account all the characteristics of the work of different players.
The trend of digitization is not through news, but global quarantine restrictions have contributed to the development and adoption of innovations. The share of cashless payments and the number of online purchases has increased significantly, with more and more Ukrainians being used to pay utility bills online. The legal framework is responsible for the changes in the market, but it is very difficult to take into account all the characteristics of the work of different players. The updated law on financial monitoring, which will come into force on 28 April, will also significantly affect the financial services industry.
An important innovation would be the ability of financial institutions to remotely identify a customer. The requirement of this rule has long matured and is very relevant for banks, as their network of branches does not cover all cities of Ukraine. On the eve of the enactment of the law, the regulator published remote identification models that are offered to banks.
Each of these verification methods has individual drawbacks. Therefore, BankID only allows you to do “secondary identification” and only works with customers of banks that are involved in this system. Electronic signature (CEP) is still rare among customers of financial institutions. The credit history bureau also does not have figures for all Ukrainians. Ukraine has more than 4 million ID card holders, but it is not even one-tenth of the population.
At the same time, video verification, which is included in the list of “full-fledged models”, causes the most questions. Banks must store terabytes of video recordings. If this is a problem for traditional players, then financial companies that work in small amounts, but with much higher speed, can face a serious problem.
Financial companies are actively developing the direction of distance lending. In 2019, 8.8 million such agreements were concluded, which is 107.5% higher than in 2018. The new law may affect these positive figures. The video verification rule will be difficult to implement. At least in the current stage of technology development and in business models utilizing microcredit services.
- Inability to automate the video verification process. The customer must communicate with the employee of the financial company. It ignores the entire work of financial companies in establishing fast and automatic loan issuance procedures. The speed of decision making has always been one of the main advantages of these market participants.
- High cost of introducing video verification techniques, including: hiring validator staff, expenses for a particular room, providing a continuous Internet signal, purchasing and storing storage media, and more.
- Human Factors – The employee will evaluate the subject. According to the video, he cannot, for example, identify fake documents.
The video verification process can hardly be called complete, because in any case, additional verification of documents, clarification of data will be required. The experience of financial companies has shown that the future lies in automated identification processes. They allow you to create the most comfortable customer experience. Our task is to minimize the effects of human factor, and video verification does not allow this.
Remote verification is a very important step for the development of the financial services market, but it is important that innovations do not impair the quality of customer service. Checking the data of BKI, BankID, Moblid, ID-card, supplemented with information from the company’s internal database, data about lost documents, as well as all types of blacklists on campus, give a good result and automate it can go. This approach is more consistent with the non-face to face business concept, which meets the recommendations of the Financial Action Task Force – FATF on money laundering.