Video verification of a customer – Polish regulator KNF announces market audit of supervised entities

KNF’s (Polish Financial Supervision Authority) statement creating good practices in the scope of application of the provisions of the Polish AML/CFT Act includes the GIFI (General Inspector for Financial Institutions) Guidelines on the identification of the customer of the obligated institution and verification of its identity in the absence of its physical presence – published on 22^nd of August 2018 with the Announcement No. 4 on the revision of the Guidelines.

In line with the position of KNF, the introduction of the customer video verification system should be preceded by a risk analysis and an opinion and consultation in the AML / CFT aspect by relevant units of supervised entities. The risk analysis should include in particular: (i) model of the video verification service, (ii) technology and technical requirements, and (iii) control mechanisms, including the control measures (mitigants) of identified risks related to the correct implementation of the customer’s on-boarding process.

Control mechanisms – mitigants of risks associated with identification and verification of the customer’s identity recommended by KNF include in particular:

1. having a video verification process policy document, including in particular issues such as: (i) defining restrictions on establishing customer relationships, (ii) hardware, technical and quality requirements on the customer’s side, (iii) defining requirements for the customer’s environment / surroundings, (iv) periodic monitoring of the customer portfolio obtained through video verification, (v) periodic verification of the procedure, (vi) the requirement to archive the records of calls,
2. analysis of cases of refusal to establish business relations by means of video verification,
3. conducting training for employees (video and telemarketers), including in the field of testing the authenticity of ID documents,
4. considering the use of increased financial security measures.

The position of KNF should be assessed unambiguously. In particular, it should be noted that the measures proposed by KNF are on one hand possible to be implemented by supervised entities, on the other – they should not constitute an excessive burden for customers. Not without significance is KNF’s presentation of specific, clear rules, which on the one hand will provide customers with an appropriate level of security, on the other hand, will introduce legal certainty for the supervised entities.

We invite you to contact our Law Firm, which offers services such as:

1. legal design of customer identification systems and verification of their identity,
2. developing internal procedures of obligated institutions in the field of counteracting money laundering and financing of terrorism, including procedures of video verification systems.