The European Banking Authority (EBA) published on the 22nd of November 2022 its final Guidelines on the use of remote customer onboarding solutions. The Guidelines provide the steps that credit and financial institutions should follow to ensure safe and effective remote customer onboarding practices, as per the applicable anti-money laundering and countering the financing of terrorism (AML/CFT) legislation and the EU’s data protection framework. The Guidelines apply to all credit and financial institutions that are within the scope of the AML Directive (AMLD).
The Guidelines set common EU standards on the development and implementation of sound, risk-sensitive initial customer due diligence policies and processes in the remote customer onboarding context. They set out the steps that financial institutions should follow when choosing remote customer onboarding tools and when assessing the adequacy and reliability of such tools, in order to comply effectively with their AML/CFT obligations. As per the press release, the Guidelines are technologically neutral and do not prioritise the use of one tool over another.
The development of the guidelines was based on the context of European’s commission Digital Finance Strategy, and they are aligned with EBA’s legal mandate to coordinate and monitor the EU financial sector’s fight against money laundering and terrorism financing.
Even though the Anti-money Laundering Directive sets what financial institutions should do to comply with their AML/CFT obligations, it does not set out in detail what is and what is not allowed in a remote and digital context when onboarding new customers. This, in combination with the uptake of new or innovative forms of customer identification during the Covid-19 pandemic, had created risks where regulatory expectations of credit and financial institutions’ remote onboarding practices were unclear.