In the increasingly ubiquitous digital environment, the Digital Single Market (DSM) has become one of the priorities of the European Union (EU). A key milestone for the DSM, Regulation (EU) No. 910/2014 on electronic identification and trust services for electronic transactions in the internal market (the eIDAS Regulation) was aimed at providing a "common foundation for secure electronic interaction between citizens, businesses and public authorities, thereby increasing the effectiveness of public and private online services, electronic business and electronic commerce" in the EU. Under this regulation, electronic identification and electronic trust services – i.e., electronic signatures and seals, time stamps, electronic delivery services and website authentication – are intended to benefit from the EU single market, ensuring uniform legal treatment across the EU, giving electronically signed documents the same legal effects as paper-based documents with handwritten signatures. The eIDAS Regulation specifies that the legal effects of an electronic signature (irrespective of its category) and its admissibility as evidence in court cannot be denied only because it has an electronic format or because it does not fully comply with the requirements of qualified electronic signatures. The regulation also provides that qualified electronic signatures have the legal effects of handwritten signatures. In addition, qualified electronic signatures based on qualified certificates issued by a Member State are recognised as such in all other Member States.
Based on the provisions of the eIDAS Regulation (directly applicable in all Member States and prevailing over any contradictory national legislation) and the Romanian legislation on distance contracts, Romanian credit institutions are allowed by law to provide certain banking services1 through online/electronic platforms.2
Online contracting comes with certain technical constraints. Electronic platforms made available by credit institutions should provide, among other things:
- A secure environment allowing the unique and trustworthy identification of clients and the safety of their personal data;
- A safe communication instrument at a distance;
- A durable medium for recording and preserving contracts (i.e. their contents and the parties' consent)3; and
- The technical possibility to sign the relevant contracts and ensure that such contracts are admissible as evidence in court.
Most of these aspects can be covered from a technical perspective. In respect of the last point, certain difficulties can be identified, but they do not concern the validity of contracts, rather the possibility to use certain types of information as evidence (i.e., which is relevant in the case of disputes occurring during the duration of the contract or in enforcement) – in particular since the Romanian legislation was somewhat inconsistent before the entry into force of the eIDAS Regulation. For the relevant contracts to gain the same legal effects as private deeds (acte sub semnătură privată), including from the perspective of their admissibility as evidence, electronic contracts must be made in written form, recorded on a durable medium, and signed both by the bank and the client with qualified electronic signatures (in the case of individual clients or authorised representatives of legal entities) or with electronic seals (in the case of legal entities). A digital contract does not always incorporate the corresponding electronic signatures, its sealing being ascertained by other digital means, such as online confirmation by pressing a button in an online platform.4
Based on the eIDAS Regulation, trust services providers such as Cryptomathic, IDnow, Connective, DocuSign and Adobe5 offer digital solutions which can be integrated in a bank's online platform, allowing customers to apply advanced and/or qualified electronic signatures. Some EU credit institutions have already implemented solutions for the use of electronic signatures and seals, for both retail and corporate clients. Such services are in addition to the usual facilities of internet/online banking platforms, allowing customers to access banking services exclusively online, without being required to be physically present at the bank's counters.
All the possibilities above (and more besides) create the perspectives for further digitalisation of the EU banking system. To our knowledge, there is interest both on the banks' side and on the clients' side in accessing online banking products. Entrepreneurial interest in the fintech area and the alternatives fintech companies can provide to traditional banking may also incentivise banks to adopt such new technologies.
1 The eIDAS Regulation sets out three categories of electronic signatures, depending on the degree of trust of the signatory's identity, i.e. (i) simple, (ii) advanced and (iii) qualified electronic signatures. The last category corresponds to the extended electronic signatures regulated by Romanian law.
2 Government Emergency Ordinance No. 52/2016 on consumer loans granted for the acquisition of immovable assets and for the amendment and update of Government Emergency Ordinance No. 50/2010 specifically prohibits the signing of retail mortgage contracts at a distance or outside areas designated for commercial purposes.
3 As per the Decision of the Court of Justice of the European Union in case No. C‑375/15 dated 25 January 2017, a web portal meets the requirements of a durable medium if the user can record the information personally addressed to him or her, so that such information can be identically accessed and reproduced, for an appropriate period, without allowing any unilateral change of its content.
4 As per the Decision of the Court of Justice of the European Union in case No. C‑322/14 dated 21 May 2015, the acceptance - by pressing a button - of the general terms of a contract concluded by electronic means represents a communication which allows the durable registration of the parties' agreement, when such technique ensures the possibility of printing and saving the text thereof before the conclusion of the contract.
5 A list of worldwide recognised electronic signatures providers may be found online at: https://www.g2crowd.com/categories/e-signature.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.