Sa, 2.12.2023

Client and bank to deal via video

Aivar Pau
, tech journalist
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Photo: Toomas Huik/Postimees

Next year, Estonia emerges as among the first nations on Earth where clients must not trot to bank branches for transactions needing personal identification. A video link will do the job. 

The need for distant communication has primarily arisen from the e-residency project. In its daily grind, a hindrance is the local laws forcing people to visit back branches w whopping two times to open an account. Therefore, a businessman in Singapore wishing to open an bank account in the EU may not opt to do that in Estonia.

«Indeed, for non-residents there’s currently a need to visit the branch twice to open an account: first to file the application and having received the decision to sign the contract,» admitted Swedbank press per Mart Siilivask.

This is the way it goes: an e-resident about to do business in Estonia and desiring to open an account at Swedbank will have to visit the bank branch, fill a blank form and answer a host of questions. The bank will take up to five days to analyse the client’s data and from there the e-resident has only 30 days to come from any end of the world to the branch again – to sign the contracts. Thus these are his options. An Estonian tour up to five days, or flying back and forth twice in one month.

Actually, the procedure is understood. «By law, banks are under obligation to know their clients and to understand the activities of the clients,» explained SEB representative Maarja Gavronski.

She said the bank needs to understand why a client wants to open an account abroad. As a rule, the reasons are place of residence or work, study, companies and business partners in Estonia.

E-residency alone won’t do

At that, thus far the Estonian bank behaviour is indicating that e-residency in itself is no reason to open a bank account here. 

Eesti e-resident Keir Giles, A British security expert and Estonian e-resident, said when describing his experience with opening an account that e-residency was among the last criteria for banks to say yes. «Instead, they expected me to have a place residence of job in Estonia. Or, at least, real strong connections,» said Mr Giles.

Thankfully, the expert had contracts to show with Estonian organisations which finally yielded the opening of an account in one of the three banks he tried. As LHV the «yes bank» was okay with digitally signed contracts Mr Giles was spared the second there-and-back-again journey.

«Once they decided, all went fast when comparing to UK or USA, easy and painless. And logging into the bank accounts with ID-card instead of passwords and PIN-calculators is so easy so it made me dizzy,» confessed Mr Giles. «If in other nations the bank staff were as agile and effective as at LHV, the world would be a place a lot happier.»

Last week, it was Estonia’s prime minister Taavi Rõivas who offered hopes for e-residential troubles to someday be over. Interviewed by ERR, Estonia’s public broadcasting, he said an alleviating amendment of the law is already in the pipelines. «At the government we have agreed that we will amend the laws so that if when opening a bank account the individual is ready to be digitally identified, say, then physical presence may be replaced by identification via Skype or FaceTime or some other video call,» said Mr Rõivas.

The amendment will be regarding Identity Documents Act and Money Laundering and Terrorist Financing Prevention Act.

Finance ministry’s jurist Ülle Eelmaa said it will be important that the communication between client and bank is recordable while using a digital identification document issued in Estonia. «During the interview, [the bank] must be convinced in identity and credibility. To that end, in the interview the individual must be interrogated to clarify his current and planned activity in Estonia and the origin of financial resources,» said Ms Eelmaa.

The law will also feature quality requirements regarding the video call such as quality of sound and picture, lighting, uninterrupted connection, and position of client towards the camera.  

Banks hop aboard

LHV bank representative Priit Rum said the amendment would definitely be welcome – the sooner, the better. «Importantly, this should not be limited to e-residents but would extend to all,» added Mr Rum.

Meanwhile, at the banking association, discussions and meetings are underway to map the risks of going video.

«For banks, this will spell thorough analysis and development of systems such as for recording of video calls and long-term preservation thereof,» said Mart Siilivask of Swedbank.

Enn Riisalu of the banking union said it would be important for the video tech used to allow identification. He also underlined the need for the service to encompass not just the e-residents but «all inhabitants of Estonia who in the future would also be able to open bank accounts without visiting the branch.» Mr Riisalu added that for banks electronic identification may mean extra risks and demands added diligence.

The several technical solutions

Definitely, the amendment will not prescribe to banks which technology they should use. Skype is an option, but there are others like the large video conference solutions all the way to the plain old video calls offered by today’s smartphones. There are also special solutions available enabling both video calls and identification like LiveBank.

«To identify Estonian e-residents, LiveBank would fit well as allowing integration into Estonian ID-card identification systems,» said Paavo Pauklin, LiveBank’s representative in Scandinavia and Baltics.

According to Mr Pauklin, LiveBank videos are actually safer yet than seeing people face to face as it allows complementary checks such as comparison of picture and biometric face database.

«Actually, this is about total digitalisation of the banking journey of the client: if a client in Argentine can create his company a bank account in Estonia without coming here, logically all other banking services could be provided digitally. Makes not much sense to allow opening an account digitally and then to invite client physically to branch for credit interview,» thinks Mr Pauklin.


At the moment, bank accounts can be opened over Internet without restrictions in:

  • Poland
  • Sweden
  • Spain
  • Germany (for instance, Commerzbank’s solution provided for secure video connection, pictures of client and his/her document, identification of document’s security elements, filling additional questionnaire, comparing picture with biometric database, and automatic reading of info from identity document shown)