Legal analysis of the establishment, scope of activities, and remote customer onboarding process of digital banks

Following the 2008 global financial crisis, branchless ―neobanks‖ emerged as digital banks operating entirely through electronic service channels. In Türkiye, their legal basis was established by the Regulation on the Operating Principles of Digital Banks and Service Model Banking (29 December 2021), recognizing digital banks as a distinct model. While the absence of branch networks and the conduct of processes through automation, artificial intelligence, API-based service architectures, and data analytics offer significant opportunities—such as reducing transaction costs, increasing service speed, and expanding financial inclusion—this model also gives rise to multi-layered and dynamic new risks. These risks include AI-driven fraud such as deepfakes, concerns regarding money laundering and the financing of terrorism, the intensive processing of personal data, issues surrounding the evidentiary value of digital records and the verification of contractual intent, and uncertainties regarding the boundaries of liability regimes. This thesis aims to systematically examine the growing problems in fraud, money-laundering risk, personal data protection, the law of evidence, and liability law resulting from digital banks' fully digital operations; to identify the points at which remote customer onboarding, remote identity verification, biometric authentication, electronic contract formation, customer profiling, and risk-monitoring mechanisms create legal gaps or ambiguities under national legislation and comparative law; and to develop solutions to these problems. This thesis adopts a multi-layered research design that brings together an examination of Türkiye's digital banking framework, a comparative assessment grounded in the guidance of European Union banking regulators and other international instruments, and a review of the literature on AI-driven threats. Based on this analysis, it proposes specific policy and regulatory measures aimed at ensuring that digital banking operates on a legally certain, transparent, and accountable footing, while preserving the scope for innovative technologies to be used.