The national eKYC banking platform built on blockchain promises to improve anti-money laundering capabilities while preventing the financing of terrorism.
- A contract to create a Know Your Customer (KYC) network based on blockchain has been signed by Pakistan Banks’ Association (PBA).
- The platform intends to improve capacities for combating money laundering and financing terrorism.
- The endeavor is a component of the State Bank of Pakistan’s continuing initiatives to improve AML oversight and promote financial inclusion.
Announcement
The creation of a Know Your Customer (KYC) platform based on blockchain was approved by the Pakistan Banks’ Association (PBA), a collection of thirty-one traditional banks operating in Pakistan. According to the Daily Times, the PBA inked the project contract on March 2 to create Pakistan’s first national eKYC banking platform based on blockchain. The initiative, which the State Bank of Pakistan is leading, intends to advance anti-money laundering expertise while preventing the financing of terrorism (SBP).
Banks are international institutions like Citibank, Deutsche Bank, and the Industrial and Commercial Bank of China. Also, the blockchain platform will improve operational efficiency, focusing on improving client experience during onboarding.
Blockchain-based Platform
To standardize and exchange customer data across a decentralized and self-regulatory network, member institutions will use the blockchain-based eKYC platform, which The Avanza Group is developing. Client information will only be shared with their consent, allowing banks to assess both present and potential customers. Pakistan recently passed new rules that would assure the introduction of a CBDC by 2025, joining other nations in the race to create a central bank digital currency (CBDC).
The eKYC project, which stands for “electronic Know Your Customer,” is a component of SBP’s ongoing initiatives to fortify the nation’s anti-money laundering and counterterrorism financing control infrastructure. PBA has been in charge of the project’s planning and management on behalf of the banking sector, working under the direction of the State Bank of Pakistan.
Implementing this platform will improve client experience, notably during account opening, and tighten AML controls at participating banks. This will promote financial inclusion.
PBA is using the “Consonance” eKYC technology from Avanza Group. With the help of the platform’s blockchain technology, banks will be able to standardize and transmit customer information across a decentralized, self-regulatory network with their permission. This would serve as a support platform for Pakistan’s banking sector, enabling all participating member institutions to assess their current and potential customers by using information and data from other banks’ “Consonance” systems.
Conclusion
Building up Pakistan’s national eKYC banking platform on the blockchain is a step in the right direction in preventing money laundering and financing terrorism. The forum will enhance client experience during onboarding and increase operational efficiencies by utilizing blockchain technology. It’s great to see that the State Bank of Pakistan and the Pakistan Banks’ Association are supporting this project, along with other foreign institutions like Citibank and Deutsche Bank. The successful adoption of this platform could set a precedent for other nations to follow and result in a banking system that is more open and safe.
