Problems of establishing the practice of remote identification of clients in the Russian banking system (economic aspects)

Abstract

The article analyses the economic aspects of establishing the practice of remote client identification by Russian credit institutions. Developing such practices is necessitated by the permanent digitization of the interaction between subjects of banking relations. The article presents the results of an analysis of the economic aspects of remote client identification by banks in developed and developing countries (Austria, Great Britain, India, China, USA, Sweden, Switzerland, and South Korea). The research reveals the theoretical and practical peculiarities of the banking biometric identification system currently functioning in Russia. On the basis of this analysis, the author identifies economic reasons for the lack of motivation of most Russian banks to develop new practices. For the first time in Russian economic literature, the key problems that impede remote client identification have been discussed systematically, including: a) risk of unauthorized access to the central database; b) concerns about privacy violations; c) lack of free access to materials on software testing, guarantees of developer companies, operators, etc.; d) risk of unauthorized access to the UBS by outsiders successfully using identification procedures; e) exposure to financial risks from unauthorized access to the UBS, transferred to clients; f) unsatisfactory results of combating banking cybercrime in Russia. The author advances several robust proposals to overcome these problems and minimize the economic risks of applying remote client identification systems in Russia, taking into account the positive and negative experiences of foreign countries.