Name
Global FinTech Guide
Country _ Name
Turkey
SectionTitle
Identification
Body
FinTechs belonging to this category provide identification services, which are required for most banking services.

Introduction

Attitude of the country towards identification services

Bank and other financial institutions are allowed to obtain support services from third parties. However, support services are very strictly regulated. The following activities of banks cannot be procured from support service organisations:

  • Activities to be performed exclusively by the bank's board of directors and by the units related to the internal systems of the bank,
  • Evaluation of loan requests of customers in terms of creditworthiness, guarantees, loan conditions and types, loan amounts in case of any kind of lending transactions, whether cash or non-cash and any transactions that are considered as loans for the purposes of the Law, and preparation of loan proposals, submission of proposals to the authorised committees or units, and decision-making about loans,
  • Accounting of banking transactions and issuing financial reports,
  • Acceptance of deposits or participation funds, and marketing activities regarding acceptance of deposits or participation funds,
  • Monitoring and evaluating the credit risk by making efforts to monitor the conditions of use and the situation with respect to the bank and legislation and to determine the possible changes in the customer's creditworthiness, from the time of disbursement until the liquidation of the allocated loans, except for collecting intelligence,
  • Safe deposit box, custody, and safekeeping services.
In this regard, as remote identification has become possible, banks can obtain identification services as support services.


Legal affairs

Obligations and requirements to provide identification services

The organisations that will provide support services to banks must;

  • have been incorporated as a capital company and have a transparent and clear shareholding structure;
  • possess a management structure, sufficient number of competent personnel, required technical equipment, document and recording organisation, business continuity plan to render support service and if it will render the service under the contract within its own structure, take required precautions against contingencies such as possible security risks, fire, and natural disasters; and the fact that such requirements have been met must have been established by the bank on site;
  • where requested and required by the banks they provide services or by the BRSA, make a commitment that they will procure liability policies in order to meet damages that may result from its service;
  • not have been prohibited or restricted by competent authorities abroad or in Türkiye in respect of their authorities in their fields of activity;
  • not to be covered by subparagraph (a) of the first paragraph of Article 8 of the Banking Law,
  • have qualified shareholders, the chairman and members of board of directors and the company managers authorised to represent the company who
    • have the qualifications listed in subparagraphs (a), (b), (c) and (d) of the first paragraph of Article 8 of the Banking Law,
    • have the financial strength and reputation as required by the business;
    • serve as a partner, board chairman, board member or auditor or manager in the authorised service organisations whose authorisation in relation to its area of operation has been cancelled or restricted by the competent authorities abroad or in Türkiye.
Moreover, the remote identification process is considered a critical process and is designed and operated in a way that does not allow the process to be initiated, approved, and completed by the information technology or customer representative alone. It is ensured that the process is initiated by the person, continued with the controls applied by the information technologies, and completed with the approval and additional controls to be made by the customer representative. If the transaction is found to be risky during the controls made by the customer representative, the transaction is sent to a second approval or terminated.

Additional comments regarding the legal situation for identification services or what FinTech’s must be aware of in this business area

As a result of considering as a critical process, it should be preferred that the products and services are produced in Türkiyeor that the manufacturers' R&D centers are located in Türkiye. In addition, such providers and manufacturers must have response teams in Türkiye. The Authority is authorised to set additional requirements for security products and other IT elements to be used by banks.


Economic conditions

Market size for identification services and biggest companies in this business area

No data is available.

Additional comments regarding the economic situation for identification services or what FinTech’s must be aware of in this business area

Remote identification services have been recently introduced into the Turkish law. Therefore, the field is very open to growth.



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