Clients of failed banks can now say goodbye to unnecessary branch visits. Thanks to banking identity verification, customers will be able to request compensation for their deposits and transfer funds to their new accounts entirely online. The Financial Market Guarantee System, which handles these payments, announced this convenient development. By law, deposits in banks, building societies, and credit unions are insured up to 100,000 euros (approximately 2.5 million Czech crowns).

Since 1995, people have had to visit physical locations to receive compensation in 20 cases of financial institution failures. “According to data from January this year, 4.65 million people use banking identity verification, and this number continues to grow. That’s why we’ve introduced the option to request compensation online using banking identity for future deposit reimbursements,” explained Renáta Kadlecová, Executive Director of the Guarantee System.

This represents an additional option for collecting funds, not a replacement. Customers will still have the choice of visiting the paying bank’s branch in person, submitting a correspondence request, or authorizing a third party.

People with permanent residence in the Czech Republic who have established banking identity verification will be able to process and receive compensation online. Komerční banka clients who have set up the KB key service will also be able to use this feature.

Clients of failed financial institutions will be informed about all methods of receiving deposit compensation, payment dates, and the total amount to be paid via registered letter. The Guarantee System will send this information to their permanent residence address as recorded by the financial institution.

Banking identity verification serves to authenticate identity and login or for secure signing in an online environment. It can be used by internet banking clients. As of this year, all eleven banks focused on regular citizens provide this service.