The Swiss regulator has revised its rules on video and online identification to accommodate electronic IDs, as firms weigh strict anti-money laundering checks against slow client onboarding.

Clients opening accounts with Swiss financial institutions will be able to identify themselves using QR codes on documents such as the Swiss driving licence, and through comparable electronic methods, from 1 November.

Last week, the Swiss Financial Market Supervisory Authority (FINMA) said it had partially revised its guidance on video and online identification to reflect technological developments, including electronic IDs. Such e-IDs can be used to identify clients onboarded through digital channels under the Anti-Money Laundering Act, the regulator said.

“In addition to other selective adjustments, identification documents bearing a QR code (e.g. the Swiss driving licence) will be treated as equivalent to those with an MRZ (machine-readable zone),” FINMA said.

The revision also covers verification of a client’s place of residence. FINMA said that “digital processes that reliably link the contracting party and its infrastructure to a place of residence are permitted” for that purpose as part of online identification.

The changes follow a public consultation. FINMA said it had taken account of concerns that artificial intelligence could create risks for e-IDs.

The move comes as regulators in Switzerland and other jurisdictions are trying to balance strict onboarding, designed to keep illicit money out of the financial system, against the risk of frustrating legitimate clients with lengthy account-opening processes.

Onboarding abandonment, where prospective clients give up before an account is opened, has been cited as a particular problem. Singapore, for example, tightened rules after a major money laundering case. See coverage here and here. Clients experience difficulties in proving and validing the "source of wealth" (SOW) of clients.