The framework of digital identity is about to be revolutionized in the Czech Republic. A group of deputies is proposing a bill that will allow banks to participate in the state digital identity scheme. Bank ID is intended to be used to access eGovernment services but also some services in the private sector.
Digital identity and eGovernment services are not completely new in the Czech Republic. The governmental portal “https://obcan.portal.gov.cz”, the gateway to public electronic services, launched in July 2018. To use the portal, one has to own either a data box or an eID card with an electronic chip in it. Although more than one million new eID cards have been issued, only around 22,000 people are registered with the portal. A possible reason for the disparity between these numbers is that the registration process is not straightforward. Registration requires both a unique reader for the eID card (which has to be purchased separately as it is not given to the user with the eID card) and specific software. The process is quite similar with data boxes. Alternatively, one may also use services of Czech POINT for the registration. However, this option requires a personal visit of Czech POINT’s contact place. The proposed legislation should simplify the registration process and open up the portal to 5.5 million new users. Demand for eGovernment services is generally expected to rise significantly.
How is our life going to get easier?
Although the proposed legislation does not extend the scope of the services offered by the governmental portal itself, its main aim is to ease access to these services. Going forward, registration will be possible through access to internet banking. In other word, clients of the banks, who have activated internet banking, will get access to the portal with the same credentials they keep with their bank.
The services available at the portal are being offered in multiple areas such as social security, trade and driving licenses or land registers. The newly established identification could be also used in the private sector. Online registration with the gambling portals serves as a good example. Sources from the Czech Bank Association, which supports the project, have indicated that the Bank ID may also facilitate the contracting between telecommunication services providers or gas / energy suppliers and their clients.
What will banks get?
Although the Bank ID service will be available free of charge, the banks will not be left empty handed.
First of all, compliance with the AML / KYC legislation will be much easier. Banks will get access to the state’s basic registers, which will allow them to have correct and current information about their clients, so they can effectively comply with their duties in the area of AML / KYC. Moreover, the possibility of identification without the presence of a person will be extended; distance identification will now be possible via the Bank ID or the eID card.
Secondly, despite the absence of charges, the banks plan to charge the commercial providers of the services (such as the telecommunication services providers or gas / energy suppliers, mentioned above), who will utilize the identity verification process while doing their business.
When can we expect the change?
Since the legislation process is still on-going, we will have to wait for the final wording of the bill. However, we can expect the bill to pass the Chamber of Deputies smoothly, as the proposal was put forward unanimously by deputies fromall the parties represented in the Chamber. The government has also given it its blessings.
According to the Czech Bank Association, the new form of ID will be available within a year and half. By that time, the Czech Republic will have joined countries such as Sweden or Norway which are already using the bank identitifications in this way.