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Remote Identification Services of Banks Become Available to Legal Entities

Remote Identification Services of Banks Become Available to Legal Entities

Turkiye
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With the Regulation Amending the Regulation on Remote Identification Methods to be Used by Banks and Establishment of the Contractual Relationship on Electronic Medium ["Amendment"] [available only in Turkish] published by the Banking Regulation and Supervision Agency ["BRSA"] in the Official Gazette dated 25.05.2023 and numbered 32201, the scope of persons who may use remote identification services has been expanded.

The Amendment has entered into force as of 1st of June 2023.

The remote identification system, which entered the Turkish legal system with the Regulation on Remote Identification Methods to be Used by Banks and Establishment of Contractual Relationship on Electronic Medium ["Regulation"] [available only in Turkish] published in the Official Gazette dated 01.04.2021 and numbered 31441, plays an important role in speeding up banking transactions and making Türkiye stand out in the service sector in the international arena. In this article, we have discussed how the scope of the Regulation has been changed with the Amendment.

A More Inclusive Service Approach

With the Amendment, new rules have been introduced to enable persons with disabilities to benefit from remote identification services. Accordingly, the checks to be carried out in the identification processes will be designed and implemented taking into account various disabilities. In addition, persons with disabilities will be able to receive the assistance of third parties during video calls, should they need it. The Amendment will be of great convenience for the persons with disabilities who wish to benefit from these services.
Legal Entities Also Included in the Scope

The representatives of legal entities are now able to have their identity established in accordance with the procedure for the identification of natural persons. Further, if the legal representative is a previous customer of that bank and has already been identified, the identification will be assumed to be completed. The authority of the person to represent the legal entity will be confirmed through MERSIS and/or the Trade Registry Gazette. The information provided by the person about the legal entity will be confirmed via matching the information in MERSIS, the Trade Registry Gazette and the database of the Revenue Administration.

Finally, the Regulation imposes an obligation on banks to take the necessary measures to reveal the ultimate beneficiary of the legal entity during the process of identification. In this context, the ultimate beneficiary, as defined in the Regulation on Measures to Prevent Laundering Proceeds of Crime and Financing of Terrorism published in the Official Gazette dated 09.01.2008 and numbered 26751, is "the real person or persons who ultimately control or have ultimate influence over the real persons who carry out transactions before the obligee, the real person, legal entity or unincorporated entities on whose behalf transactions are carried out".

The Next Step: Remote Identification with Artificial Intelligence

With the additional article included in the Regulation, the legal infrastructure for regulations that will keep pace with the rapid development of the banking sector was also prepared. Accordingly, the BRSA is authorized to determine the procedures and principles regarding the use of artificial intelligence-based methods for the transactions to be performed by the customer representative. It is now made clear that the banking sector will benefit from the latest technologies and that there is an expectation that there will be a development in this direction.

Conclusion

The banking sector, one of the most important pillars of the service sector, will be able to address a wider customer pool with the development of remote identification systems. With the entry into force of the Amendment on 1st of June 2023, it will be easier for disabled individuals to use the system, legal entities are also able to benefit from the remote identification system, and this Amendment paves the way for the integration of developments in artificial intelligence into banking systems.

By Yasemin Keskin, Senior Associate, Guleryuz & Partners