The ease with which consumers are willing to leave their traditional suppliers and move to new digital services is forcing banks to adapt their offer to modern trends. These include, among other things, new ways of providing distance loans without physical contact with the client. So far, the provision of credit has been linked to a “paper” process with manual verification of the client’s identity according to personal documents. However, new digital solutions allow for a shift in this area as well.
Hungarian K&H Bank, from the Belgian KBC group, which includes, for example, ČSOB, launched an online “paperless” loan based on the Impresto system, which was supplied by our company in cooperation with EY. Impresto draws on its experience with a similar system that has been successfully operated by Česká Spořitelna. We delivered their paperless loan as the first purely digital product of its kind.
The intention of the project is to enable our own clients and clients of competing banks to quickly and easily obtain funds from the comfort of their home, without visiting a branch or waiting for delivery of documents for signing by courier, with the approval and crediting of the account within 15 minutes.
The entire loan application process takes place in five simple and understandable steps, and the client simply needs a computer equipped with a webcam and internet connection. Once the amount of the loan has been selected and personal data entered, the video will be identified externally by Facekom. The client will show the operator two personal documents via the camera to check the data entered in the first step. The operator also asks the client various questions, e.g. whether he is a politically exposed person, whether he is an existing or a new customer, etc.
Subsequently, the client uploads the last three statements from his / her current account to the system, where he / she regularly receives a payment. The technology-based system developed by our company extracts all the necessary data to determine the client’s credit score and evaluates its eligibility for the loan.
The last step of the application is an electronic signature corresponding to Regulation No. 910/2014 of the European Parliament and of the Council on electronic identification and trust services for electronic transactions in the internal European market (eIDAS). After approval, the money is transferred to the client’s account and all documents are downloaded to their computer.
Although banks in both countries must follow the same European regulations for such projects, in particular the above mentioned eIDAS, the implementation of Impresto in Hungary has shown that experience from one EU Member State may not be directly transferable to another due to a different interpretation of requirements by the regulator. The fundamental difference is, for example, the admissibility of a video to verify a client’s identity remotely. While Czech interpretation does not allow it, in fact it is the only possible one in Hungary.
The difference between the Czech and Hungarian projects was also in the regulator’s emphasis on the project audit, whose unprecedented scope and complexity caused a several-month delay in putting the system into full operation. However, our audit eventually went through a single complaint as fully complying with strict banking and regulatory requirements, despite the difficulty of working in a foreign language environment.
In the future, K&H Bank is considering the use of Impresto or its components for other applications, such as self-service kiosks at branch offices or Internet banking. In view of the uniqueness of the know-how we have built up in this area, other banks in the Central European region are also interested in solving a paperless loan.