Hungarian K&H Bank Implements Online Paperless Loans for Both New and Existing Clients with Trask Impresto

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The ease with which consumers are willing to leave their traditional providers for new digital services forces brick-and-mortar banks to adapt their offerings to modern trends. Among these trends is the provision of remote loans without physical contact with the client, which until now was tied to a "paper" process with manual verification of the client's identity using personal documents. However, new digital solutions allow advancements in this area as well.

Hungarian K&H Bank, part of the Belgian KBC group, which includes ČSOB among others, has launched an online "paperless" loan based on the Impresto system provided by our company in collaboration with EY. Impresto builds on the experience of a similar system already successfully operated by Česká spořitelna. We delivered its paperless loan as the first purely digital product of its kind.

The project's intention is to enable both the bank's own clients and those of competing banks to easily and quickly obtain financial resources from the comfort of their homes without the need to visit a branch or wait for documents to be delivered for signing by courier, with approval and money credited to the account within 15 minutes.

The entire loan application process takes place in five simple and understandable steps, and all a client needs is a computer equipped with a webcam and internet connection. After choosing the loan amount and entering personal data, identification is carried out through video by Facekom. The client shows two personal documents to the operator via camera for verification of the details entered in the first step. The operator then asks various questions, such as whether the client is a politically exposed person, whether they are an existing or new customer etc.

Subsequently, the client uploads the last three bank statements of their regular account where their salary is regularly deposited. The system, based on technologies developed by our company, extracts all necessary data from the statements to determine the client's credit score and assess their loan eligibility.

The final step of the application is an electronic signature compliant with Regulation (EU) No. 910/2014 of the European Parliament and of the Council on electronic identification and trust services for electronic transactions in the internal European market (eIDAS). Upon approval, the money is transferred to the client's account and all loan documents are downloaded to their computer.

Although banks in both countries must comply with the same European regulations, particularly the aforementioned eIDAS regulation, the implementation of the Impresto system in Hungary has shown that experiences from one EU member state may not be directly transferable to another due to different interpretations of the requirements by the regulator. A significant difference, for example, is the admissibility of video for remote client identity verification. While the Czech interpretation does not allow it, in Hungary it is practically the only possible method.

The difference between the Czech and Hungarian projects was also in the regulator's emphasis on auditing the project, whose unprecedented scope and complexity caused several months' delay in launching the system into full operation. However, our solution eventually passed the audit without a single complaint, fully meeting strict banking and regulatory requirements despite the challenges of working in a foreign language environment.

K&H Bank plans to use the Impresto system or its components for other applications in the future, such as in self-service kiosks at branches or as part of online banking. Given the uniqueness of the know-how we have built in this area, other banks in the Central European region have also expressed interest in the paperless loan solution.

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