“Digit-All Life & Banking”

 

Not long ago, when we first started talking about digital transformation and/or digitalization, about 15 years ago, they looked at us as like crazy and maybe a little ridiculous. They look at it as futuristic dreamer in the last 5 years, visionary in the last few years, and caught in the moment with the pandemic. No matter what category you belong to, forward-thinking or not, know that the absolute truth has always been there. So what was this digital transformation or digitalization? Now the formula is extremely simple: “Everything x Digital = Digitization”; in other words, it can be called “DigitAll” in an even more popular and cool phrase.

Our lives as individuals have also changed profoundly in a world that has been digitized even faster with the global epidemic. Now, not only that our shopping habits have almost completely turned into e-commerce, but also because our business lives have evolved to work remotely; thus most of our lives are spent in front of a computer, iPad or mobile phone. According to a research conducted by the international digital trend research company Hootsuite on more than 100 countries, including Turkey, in 2022; We spent 6 hours and 43 minutes digitally across the world. Here, I think, the digital film and TV series platforms that cure our troubles in our spare time with the on-line interviews we have made for work and socialization. I think the most basic indicator of this is that Netflix increased the number of its members to 270 million and its turnover more than doubled to 1.7 billion dollars in the first quarter of 2020.

So, how did we make the payments for the services or goods in question during these times when we sit at home and spend a lot of time on digitalization? Of course, by credit card or online money transfers. I have been involved in projects in various parts of the world or have worked directly in those geographies; Europe, Americas, Africa, Far East and Middle East.

However, of course, we cannot expect the legal infrastructure for such a dynamic sector with such frequent developments to progress at the same pace. However, here too, we should not forget the works of the Banking Regulation and Supervision Agency (“BRSA”) before and the Central Bank after the transfer of authority. They are extremely solution-oriented and have done great work that allows service providers to improve their business while protecting the interests of users. Although Europe has made a legal transition to the concept of open banking by transitioning to PSD2 (Payment Services Directive). We still hope to see full reflections of PSD2 and despite the lack of secondary legislation, which is partially late, we’ve seen serious legislative work in a few years. With the amendments made to the Law No. 6493 on Payment Services and Electronic Money Issuance and Payment Institutions and Electronic Money Institutions (“Law”) with the Omnibus Law No. 7192, “payment initiation order” and “account information provision” services have also been defined.

However, if we leave aside these delays regarding the law of online payments and look at the developments in digital banking, we see really important steps. Remote customer acquisition was regulated for the first time with article 43, titled remote identification and 3rd party trust, of the Regulation on Banks’ Information Systems and Electronic Banking Services, which was first published by the BRSA on March 15, 2020 and entered into force on January 1, 2021. In addition, “Regulation Amending the Regulation on Measures Regarding the Prevention of Laundering Proceeds of Crime and Financing of Terrorism (‘Measures Regulation”), which includes matters that will allow remote identification of real persons,” was issued by the Financial Crimes Investigation Board (“MASAK”) on February 24, 2021. and entered into force on 1 May 2021. In addition, the Regulation on Remote Identification Methods to be Used by Banks and the Establishment of Contract Relationship in the Electronic Environment, which is complementary to all these legal developments and is eagerly awaited, was published by the BRSA on April 1, 2021 and entered into force on May 1, 2021. Finally, with the Financial Crimes Investigation Board General Communiqué No. 19 (“Communiqué”) dated April 30, 2021 and entered into force on May 1, 2021, the way for the obligors subject to MASAK legislation to conduct their identification remotely, and the procedures and principles regarding the process have been regulated. It is also an important development that payment and e-money institutions have been added to the list of liable parties with the amendment made in the Regulation on Measures Regarding the Prevention of Laundering Proceeds of Crime and the Financing of Terrorism. Because, this has opened the door for the aforementioned institutions to benefit from remote identification applications, which can only be implemented by banks at the moment, with the secondary legislation to be issued by the relevant public authorities in the near future.

In the Regulation on Information Systems and Electronic Banking Services of Banks, electronic banking services are defined as “Any kind of electronic distribution channel, such as internet banking, mobile banking, telephone banking, open banking services, and ATM and kiosk devices, through which customers can perform remote banking transactions or instruct the bank to perform them. is expressed as “. Similarly, the electronic channel in the Communiqué; It is defined as “electronic service method such as mobile application, web-based application, internet branch, telephone service, where customers can perform remote identification process”. In the establishment of a permanent business relationship with remote identification, remote communication tools such as informatics or electronic communication devices over an electronic channel can be used within the methods determined for the obliged parties in this Communiqué. It is envisaged that the method to be applied will be designed to include all the information required for face-to-face identification and to have minimal risk in confirming the information, and it is not obligatory to take a signature sample in remote identification.

All of these are very serious works that were prepared and put into effect in a short time and paved the way for the sector. They are also great services for us users;, being able to benefit from many banking services, including opening a bank account, without having to leave our home, shopping through secure platforms, and being able to pay by credit card or money order is an invaluable blessing in such a period.

In terms of payment and credit card transaction security; It is also noteworthy that banks, payment service providers and e-commerce platforms work together and also separately. Especially the big marketplaces both establish their own anti-fraud teams and benefit from these additional services of banks or payment service institutions. Here, too, there is a great struggle by the heroes hidden behind the invisible curtain. Since this rapid digital transformation of our daily life is inevitable now, this transformation also brings serious risks. The risks like we’ve never seen before. The healthy growth of digital banking, on-line payment systems and e-commerce, which are our payment gateways to the outside world, depends on trust, and trust in these areas directly depends on cyber security. The commercial situation in our country of Digit-All life and the digital banking and payment services sectors, which are the most important tools related to it, is extremely promising. Although legal developments cannot be expected to be at the same pace, we have full faith that this healthy growth will keep up. I wish you safe, technologically balanced and healthy digital days in your life…

 

Mr. Emre BERK

Law and Digital Transformation Consultant