On October 12, 2020, the Resolution that reformed the General Rules applicable to Credit Institutions (the “Resolution”), issued by the Mexican Banking and Securities Commission (the “CNBV”), was enacted in the Federal Official Gazette.
Purposes of the Resolution
The Resolution modifies several articles related to the identification data necessary for effective and potential clients to execute remote banking operations and agreements.
Generally, the purposes of the Resolution are:
- To enable financial inclusion by reinforcing the credit institution’s proceedings to approve remote identifications;
- To prevent and detect identity theft of financial consumers, and
- To strengthen the biometric data required to obtain different banking products, including full-transactionality deposit accounts (i.e., Level 4 accounts) for both individuals and legal entities.
This Resolution is related to our client alerts dated June 26, 2020, and September 25, 2020.
Relevant aspects of the Resolution
I. Organization of biometric databases
First, credit institutions are able to organize databases of biometric information from their existing clients to verify their identities, in connection with the execution of contracts for active, passive and service operations; requests of means of payment; cash withdrawals and funds transfers. Said verification consists of reviewing the coincidence of biometric data against the records held by specific authorities (e.g., the Mexican Voting Institute).
Since the aforementioned verification can substitute other identification measures while contracting banking services, it has the potential to accelerate the obtainment of new products, as well as to increase their security.
To arrange said database, credit institutions shall (i) ask clients for their voting identification, or another ID containing biometric information that can be authenticated; (ii) gather the biometric information of the credit institutions’ employees who will obtain the clients’ data, and (iii) undertake actions allowing the verification of said biometric information.
II. Use of biometric data for the execution of remote banking agreements
The Resolution also authorizes credit institutions to use biometric information to identify their effective and potential clients of Mexican nationality (either individuals or legal entities), as long as credit institutions verify such data with authorities.
This applies, particularly, to the execution of banking agreements related to the opening of full-transactionality accounts (i.e., Level 4 accounts), as well as consumer and commercial leases.
In this regard, credit institutions shall:
- Obtain, previously, an authorization by the CNBV.
- Confirm whether the relevant person is already one of their clients. If so, the credit institution shall authenticate said person using a one-time password and, afterwards, verify the biometric data.
In case the potential client does not yet have a sustained business relationship with the credit institution, said person shall fill in a form containing the necessary data for identification purposes, in terms of the General Regulations under article 115 of the Credit Institutions Law (i.e., the anti-money laundering banking rules), along with a copy of his voting ID or another official identification.
- Implement technological mechanisms allowing (i) audiovisual identification of the potential client, and (ii) safekeeping of information, preserving their integrity in an adequate fashion.
- Suspend the onboarding process when the credit institution detects irregularities that do not allow the adequate verification of the potential client’s identity.
In case the credit institutions cannot verify with authorities the biometric information of current and potential clients, those credit institutions may have audiovisual communication with the relevant persons for authentication purposes. Said audiovisual communication must be recorded and ready to be reproduced whenever necessary.
Credit institutions may request CNBV to approve other mechanisms to confirm remotely the biometric data of their effective or potential clients.
The Resolution became enforceable on October 13, 2020. Nonetheless, credit institutions have a nine-month period (starting from such date) to ask for CNBV’s approval allowing them to remotely open bank accounts with full transactionality, as well as remotely granting commercial and consumer loans. In this regard, any previous authorization for credit institutions to identify their effective and potential clients remotely will remain valid as long as the CNBV does not resolve on the new authorizations to be issued in the terms described above.