Are the exposures created between service providers, which are caused by clients signing up to new products outside of business hours, an “unexpected outflow” in the context of applying the exemptions granted in Article 390(6)(c) of the Regulation (EU) No 575/2013 as amended by Regulation (EU) 2019/876 (CRR2)?

New technologies allow modern financial service providers to allow automated customer onboarding with minimal manual input. This means that onboarding can occur 24/7 (subjecting to the need for manual intervention triggered by controls). It also means that customers who have previously completed the “know your customer” (KYC) can agree to sign up to new products, including with different service providers, 24/7.

To the extent that this involves a customer who holds an account with one company signing up to a new set of account based services with another, this can result in an out of hours transfer of funds.
This leads to situations where exposure increases not because of traditional payment transactions, but because, for example, customers have onboarded to a new service provider and have elected to transfer all or part of their balance there, and that transfer is to be settled in net between the two companies.

This is an issue for us where a customer of our electronic money institution signs up to be a customer of our bank overnight, for example.