Abstract:

One of the fundamentals of a business model of Non Bank Financial Institution (NBFI) is the identification of its customers. The EU has strengthened transparency rules in an effort to further prevent terrorism financing, tax avoidance and money laundering throughout Europe which has led to the introduction of the Fourth Anti-Money Laundering Directive (4 AMLD), together with the Payment Service Directive 2 (PSD2). As to cross-border activity of an enterprise, meaning simultaneous activities in different countries without a physical presence of itself the business model can be only realized in those countries where the customer's identification and verification could be carried out remotely. Otherwise, a financial institution's cross-border business model without a branch network would not be possible. The purpose of this paper is to determine what modalities and conditions for the customer's remote identification are enforced in member States’ legislation in order to find out in what countries is it possible to identify customers remotely. Several research methods have been used in this research. By using the comparative method, the author compares the laws of the EU Member States and the individual rules relating to the customer's remote identification. As a result of the research, the EU countries could be determined where the NBFI could identify its customers remotely and modalities and differences in each relevant country, which FIs have to take into consideration by building the identification framework within its cross-border business model.