I have been very lucky during my career: thanks to my insatiable quest for information about money laundering and AML, I have learned so much from so many people. The key, I think, is to listen carefully and to see every question as a gateway to learning something new. This week, for instance, a client asked me about the FCA’s stance on video ID. The debate around how to verify client identity remotely is not a new one, but it has been given a firm and accelerating kick up the backside by the pandemic restrictions under which so many of us are currently living. Video ID is exactly what it sounds like: the client appears remotely on your screen and does whatever needs to be done to prove their identity, rather than coming in to your office to drink your coffee, eat your biscuits and show you their passport. The reason this client was asking was simple: his firm is part of a Swiss group, and in Switzerland the regulator has issued very detailed guidance on when and how to use video ID, so his Swiss colleagues were asking whether that guidance tallied with the guidance in the UK. Interesting question, thought I – and an opportunity to learn about video ID.
And this is what I have learned:
- In Switzerland, video ID is nothing to do with COVID – firms regulated by FINMA have been required to amend their “due diligence requirements for client onboarding via digital channels to take account of technological developments” since 1 January 2020, with the idea first mooted in 2016
- The FINMA guidance is wonderfully detailed, covering what documentation must be received prior to the video ID session, how that session must be set up, who must be there, what quality of connection is required and more
- In the UK, government guidance has been issued on the use of video ID by conveyancers, by those checking DBS applications (to work/volunteer with vulnerable people), and by those making wills
- Guidance on the use of video ID has been released by the Guernsey financial regulator
- No guidance on the use of video ID by the financial sector has been issued by the FCA.
I am always surprised that financial regulators are not more magpie-like – surely if someone else has issued some shiny new guidance on a shiny new topic, it would make sense to pilfer that for your own use. (And by “pilfer”, of course I mean read, inwardly digest, draft, put out for consultation, redraft, and then publish to great fanfare.) And if a topic is obviously of general and immediate interest – this client is not the only one to mention video ID – then surely a short “we’re thinking about it” press release would calm the nerves.