BankID – a solution to the Czech misery of KYC | Allen & Overy LLP

The introduction of BankID, however, is expected to level the playing field and provide these foreign online gambling operators with a new and fairly straightforward way to comply with their KYC obligations under anti-money laundering legislation.

BankID identification tool

On January 1, 2021, Law No. 49/2020 Coll., Which implements the BankID identification tool, entered into force. Although this law constitutes an amendment to the Banking Law, the AML Law and other laws, its more apt name is the Bank Identity Law, informally abbreviated as BankID.

The Bank Identity Act expands the current scope of activities that banks are allowed to conduct, especially by providing electronic identification and authentication to their customers. This will allow the more than five million Internet banking users in the Czech Republic to use the existing bank identity authentication tools used to log into Internet Banking in order to gain verified access to the electronic systems of public administration. The same authentication tool will also be used to easily prove their identity in private contractual relationships carried out online, such as the creation of a player account with an online gambling operator. In general, Czech banks have activated the BankID identification tool for all existing Internet banking users in the Czech Republic with the option to unsubscribe from this service.

BankID services can only be provided by a bank or BankID provider (i.e. a company established by one or more banks for the purpose of providing BankID services). In February 2021, the ten largest Czech banks agreed to cooperate in the development of the required BankID technical solutions and, in this regard, established Bankovní identita as, a company which is currently the sole provider of BankID in the Czech Republic. It will provide private companies (e-commerce, gambling operators, etc.) with BankID services, such as the realization of KYC.

Bankovní identita as will render BankID services to private companies under a contract between the Czech banks, Bankovní identita as and the relevant private company for a fee set by the price list of services, which is published on Bankovní identita as websites.

Bankovní identita as is about to fully launch its operation and render its services to the private sector in the summer of 2021.

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New Czech legislation introduces BankID – a tool to facilitate the KYC checks required by anti-money laundering laws, when opening a player’s account with an online operator. Non-Czech online gambling providers will therefore no longer need to rely on the CzechPOINT KYC procedure and instruct their customers to obtain documents from public authorities.

BankID uses the existing online banking authentication which is already used by five million users in the Czech Republic. BankID services will be provided to private companies by Bankovní identita as, an association of the ten largest Czech banks for a fee fixed by a price list.

BankID will be a stand-alone KYC tool adapted to meet both the requirements of the Czech AML Law and the Gambling Law for the identification of players.

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Clint Love

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