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KYC Requirements for Financial Institutions in Austria: What You Need to Know

The Austrian Financial Market Authority (FMA) has introduced new changes to its digital onboarding requirements to enhance customer onboarding and identity verification processes. The amendments aim to improve the security and integrity of online identification procedures, making it essential for financial institutions operating in Austria to stay compliant.

Key Updates: Document Authentication and Capturing Image

The FMA’s legal provision on Online Identification Regulation requires document authentication with optical security measures at least as good as holographic elements. Electronic data processing generates a graphical representation of the content displayed on the screen for verification and documentation purposes. However, customers can provide electronically signed photo identity documents instead of screenshots.

Third-Party Verification Vendors and Automated Identification Processes

The FMA defines a third-party verification vendor as a legal person or body that processes personal data on behalf of financial service providers.
Automated identification processes involve automatic online identification techniques that do not require human involvement.

Biometric Authentication: New Requirements

Financial institutions can now integrate fully automated biometric verification solutions for online identity verification without requiring human involvement. The biometric identification method includes:

Presence check: clients must place their faces in front of the camera for authentication.
Multi-step customer verification process: a series of steps to verify the customer’s identity.
Collecting government-issued identity documents embedded with NFC chip data instead of taking pictures.

Presence Check

To verify the customer’s presence during the onboarding process, clients must place their faces in front of the camera for authentication. Biometric solutions embedded with liveness detection features are best at filtering out bad actors at this stage.

NFC-based ID Verification

Only NFC-based identity documents issued by the government can be used for biometric verification.
Data from these documents is retrieved using NFC readers, and financial institutions must validate the electronic signature’s legitimacy and data integrity from January 1st, 2023.

Financial institutions must obtain consent from customers before using their biometric information for KYC verification procedures under Article 9 (2) a) of the EU GDPR.

Staying Compliant: Key Takeaways

To stay compliant with Austria’s biometric identification requirements, financial service providers must:

Implement rigid security measures to ensure the integrity and security of verification processes.
Perform liveness detection and record a video of the presence check process.
Document biometric identification processes in a clear and understandable manner.

How Shufti Pro Can Help

Shufti Pro offers state-of-the-art facial biometric verification solutions that can help financial institutions meet Austria’s new identity verification requirements. Our solutions use thousands of AI models to authenticate customer identities, verify live presence, and combat financial crimes with 98.67% accuracy.