The requirement to perform reverification in every case without being able to reuse an initial verification increases the administrative burden on obliged entities and consumers alike. The basic need for innovative KYC process solutions at European level is, in fact, acknowledged. This is underlined, for example, by the ‘Opinion on the use of innovative solutions by credit and financial institutions in the customer due diligence process’, published by the European Supervisory Authorities (ESAs) on 23 January 2018. The ESAs’ right approach does not go far enough, though. Particularly the reusability of KYC processes is not yet on the ESAs’ agenda. Progressing the right approach towards the reusability of initial verification is, however, equally important in order to further strengthen both the EU as a business location in international competition and pan-European consumer protection.
In this position paper, drafted jointly by banks and fintechs, the Association of German Banks wishes to draw attention to the existing challenges and propose regulatory solutions.