BankID – a fix to the Czech KYC misery
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Publications: 21 December 2022
Publications: 06 April 2020
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Since 1 January 2017, when the Act No. 186/2016 Coll., on Gambling (the Gambling Act) entered into force, foreign online gambling operators have been at a disadvantage in the methods of identity verification of their customers available when compared both to their Czech counterparts and to local land-based gambling operators.
The introduction of BankID should however level the playing field and provide these foreign online gambling operators with a new and fairly simple way of complying with their KYC obligations under the anti-money laundering legislation.
BankID identification tool
On 1 January 2021 the Act No. 49/2020 Coll., which implements the BankID identification tool, came into effect. Although this piece of legislation constitutes an amendment to the Banking Act, the AML Act and other laws, the most apt name for it is the Act on Bank Identity, unofficially abbreviated as the BankID.
The Act on Bank Identity broadens the existing scope of activities that banks are authorised to carry out by, most importantly, the provision of electronic identification and authentication to their clients. This will allow the more than five million internet banking users in the Czech Republic to utilise the existing bank identity authentication tools used for logging in to internet banking to gain verified access to public administration electronic systems. The same authentication tool will also serve to easily prove their identity in private contractual relationships carried out online, such as creating a player account with an online gambling operator. In general, the Czech banks enabled the BankID identification tool for all existing internet banking users in the Czech Republic with the option to opt out from this service.
The BankID services may be carried out only by a bank or a BankID provider (i.e. a corporation established by bank(s) for the purpose of providing BankID services). In February 2021 the ten biggest Czech banks agreed to cooperate on the development of the required BankID technical solutions and in this regard established Bankovní identita a.s., a company that is currently the sole BankID provider in the Czech Republic. It will provide private businesses (eCommerce, gambling operators etc.) with BankID services, such as carrying out KYC.
Bankovní identita a.s. will render the BankID services to private corporations under a contract concluded between the Czech banks, Bankovní identita a.s. and the relevant private corporation for a fee set by the price list of services, which is published on Bankovní identita a.s. websites.
Bankovní identita a.s. is set to fully launch its operation and render its services to the private sector in the summer of 2021.
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A new Czech legislation introduces BankID – a tool facilitating KYC checks required by the anti-money laundering laws, when opening a player’s account with an online operator. The non-Czech online gambling providers will thus no longer need to be reliant on the CzechPOINT KYC procedure and burden their customers with obtaining documentation from public authorities.
BankID utilises the existing internet banking authentication that is already used by five million users in the Czech Republic. The BankID services will be rendered to private businesses by Bankovní identita a.s., an association of the ten biggest Czech banks for a fee set by a price list.
BankID shall be a standalone KYC tool suitable to satisfy both the Czech AML and Gambling Act requirements for the identification of players.