The identification market is an established market. FinTechs services in this business area are made used of by other FinTechs or credit and financial institutions.
With regard to the identification of the customer as the main “Know Your Customer” – element (KYC-element) the German money-laundering act (Geldwäschegesetz – “GwG”) and the circular 3/2017 (GW) for video identification procedures by the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – “BaFin”) have to be complied with.
According to the GwG there is the possibility for obliged parties, escpecially credit and financial institution, to delegate the fulfillment of the due diligence requirements to third parties via a data processing contract, especially with regard to the identification process.
The third parties don’t need any license to conduct their identification service.
With regard to the collection, storage, modification or transfer of the data retrieved during the identification process the Federal Data Protection Act (Bundesdatenschutzgesetz – “BDSG”) has to be complied with.
The main identification services provided by third parties currently are video identification services or identification through post offices (Post Ident).