Austria Eases Biometric Authentication Requirements for Financial Services Providers
New Amendment Brings Changes to Online Identification Regulation
Vienna, Austria - The Austrian Financial Market Authority (FMA) has introduced a new amendment to the country’s Online Identification Regulation. This move will allow financial services providers and cryptocurrency service providers to use automated biometric procedures for remote online customer onboarding.
Streamlining Customer Onboarding Processes
The amendment enables financial institutions operating in Austria to perform entire or parts of the customer onboarding process without human intervention using automated electronic procedures. Industry experts believe this change will:
- Enable financial services providers to streamline their onboarding processes
- Reduce costs associated with manual identification methods
- Improve overall efficiency
Conditions for Biometric Identification Procedure
The use of biometric identification procedure comes with several conditions, including:
- State-of-the-art and regularly updated biometric procedures
- Adequate security measures
- Comprehensive documentation and recording of the onboarding process
- Customer consent in accordance with applicable data protection requirements
Liveness-Check Feature Ensures Authenticity
A critical aspect of the biometric identification method is the “liveness-check,” which determines whether a fingerprint or face (or other biometrics) is real or fake. To achieve this, customers may be required to:
- Read out a sequence of characters or words defined in the identification process
- Scan a randomly selected area on the screen by moving their head
- Move their head in different directions when prompted
Near Field Communication (NFC) Technology Raises Concerns
The introduction of NFC technology as a means to verify electronic signatures and data integrity has raised concerns. Many ID cards, especially foreign ones, are not yet equipped with NFC chips, while not all smartphones can technically read these chips.
Transitional Period Introduced by FMA
To address these concerns, the FMA has introduced a transitional period until December 31, 2022, during which NFC technology can be dispensed, and ID cards without electronic signatures are permitted if they are visually checked and a copy kept.
Expected Impact on Austrian Financial Market
The implementation of automated biometric KYC onboarding is expected to have a positive impact on the Austrian financial market. It will enable businesses to balance user experience with compliance requirements while reducing costs associated with manual identification methods.