Innovation in a Person’s Electronic Identification – BankID

An innovative method for a person’s electronic identification is coming to the digital market with effective from 1 January 2021.

From 1 January 2021, banks will be newly entitled to confirm the identity of their customers at the request of a third party. The third party can be the government, which receives the service for free, or the commercial sector, which will be charged a fee for the service.

Banks will be able to confirm the identity of their customers directly, or the Banks Act will allow banks to establish a private entity, which will mediate confirmation of the identity of all clients at the entity of associated banks.

There are currently two planned aggregate entities in the Czech Republic, namely Bankovní identita, a.s., whose shareholders are Česká spořitelna, a.s., Československá obchodní banka, a.s. (“ČSOB”) and Komerční banka, a.s. The second platform is Aliance pro bankovní identitu, backed by Air Bank a.s., Fio banka, a.s. and MONETA Money bank, a.s.

Banks are going through their own accreditation process for identity confirmation, so the above-mentioned platforms will primarily be used for data aggregation and communication with third parties. The first bank that has already successfully passed the accreditation process of the Ministry of the Interior is ČSOB.

The banking identity confirmation service described above will introduce to the private sector new solutions for online client identification, for example, in the context of AML obligations or in the contracting process.

The advantage for confirmed private individuals will be, in particular, access to public administration services, where bank identification will enable persons to communicate with authorities and other public administration entities without a data box or the use of e-ID services. Another advantage is the single-sign-on service, which will focus on unifying access routes to many products. With the help of a bank identity, private individuals will be able to log in to various accounts, such as an account with their mobile operator or an account maintained by a company providing electricity or others. Persons will no longer need to create and remember individual passwords for each product. The services under consideration also include the possibility of signing contracts electronically. Simply enter the contract without the need for a handwritten signature via the service provider’s online form.

The main difference from the current situation, where data boxes, e-IDs, qualified electronic signatures, and others are used for the authentication of persons, and the main reason for the attractiveness of the described solution, is the simplicity and availability of this service.

The supervisory authorities for the provision of the banking identification service will be the Financial Analytical Office and the Czech National Bank.

Do you have questions about bank identification and its application? At Stuchlíková & Partners, we have been dealing with the issue of digitization in the financial sector for a long time. Contact us at info@stuchlikova.com to arrange initial consultation.