Moving into the future, opening bank account online with your smile in China

Written by Qinwen Wang || 13 Jan 2016

A recent announcement from China's central bank, the PBOC, now allows banks to remotely open bank accounts, which was previously not possible - there was at least a bank visit and some paperwork needed. The announcement allows customers to open new accounts via their mobile, which should increase competition significantly between the BAT and traditional banks. 

However, the real impact will not be on China's newly launched digital banks, but on the traditional banks. Some estimates indicate that the introduction of remote account opening for the traditional banks could mean that at least 30% of branch employees lose their jobs as banks shift account opening online.

The newly released remote account opening regulations will also push banks to develop a new online financial system including IT infrastructure and the work flow to support the re-design. Security will be a primary issue to validate identity of the user which will push banks to implement face recognition and other verification technology to achieve the same results as real-name face to face personal authentication. There will be some siginficant IT cost involved in this shift. 

Is remote account opening be the precursor to face recognition payment? Very probable. In 2015, Jack Ma, the chairman of Alibaba Group, introduced Face++ ‘Smile to Pay’ face recognition technology to make payment through ‘scanning’ your smile. It is reported that Face++ has acquired 97.27% accuracy rate in face recognition. As per for Alibaba’s competitor Tencent, Tencent’s private bank WeBank has incorporated the face recognition technology into user’s the second bankcard linking process. Youtu is the technology branch of Tencent in developing cloud and face recognition technology. Whether or not users will use facial recognition technology is to be debated. Most seem happy with the existing PIN technology that Alipay and Wechat have in place now, but this might change in the future too. 

In either case, there is litte doubt that remote account opening will be a key strategy for all banks going forward.

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