Abu Dhabi Authorities Issue Positive Report On Blockchain KYC Project
Regulatory authorities and banks in Abu Dhabi have registered tangible benefits from testing a shared Know Your Customer utility supported by distributed ledger technology.
In February, a coalition of industries comprising Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Al Ansari Exchange, Al Fardan Exchange, First Abu Dhabi Bank, UAE Exchange and ADGM was formed to develop a proof of concept to determine the governance framework and the functional requirements of an e-KYC service.
The app created for the test phase gives clients with a single location where client recognition and authentication can be carried out once for a client with approved data that other participant safely shares. According to Richard Teng, CEO of ADGM’s regulatory arm, the application was a sweeping improvement over the present recurring and cost-intensive tactic to verifying client bonafides.
Richard Teng said “By harnessing the power of technologies such as blockchain, the e-KYC project has demonstrated tangible benefits that may be offered by an e-KYC utility for financial institutions in the UAE. In addition to enhancing KYC checks across the industry, the utility can achieve significant cost efficiencies and financial inclusion driven by unified KYC standards.”
The next step in the project will determine whether the benefits of easier access to banking services can be extended to small and medium – sized enterprises. The award – winning International Financial Center in the capital of the United Arab Emirates, Abu Dhabi Global Market (ADGM), is pleased to announce the successful conclusion of the first phase of the electronic know-how (e-KYC) utility project for the industry.
In collaboration with its project consultant, KPMG, the ADGM Financial Services Regulatory Authority (FSRA) has published a high-level summary of the project scope and key insights for the benefit of the financial industry. The e-KYC project, launched in March 2018, was collaboration between the FSRA and a consortium of major financial institutions including Abu Dhabi Commercial Bank, Al Ansari Exchange, Al Fardan Exchange, First Abu Dhabi Bank and UAE Exchange.
The aim was to develop a proof of concept (PoC) for the testing of operational and technological models of the e-KYC tool. The FSRA has also developed a governance framework and business model in consultation with the consortium members, on which the e-KYC utility can operate on an inclusive and sustainable basis.
The use of digital platforms to share information, process and test solutions is a central part of the FinTech strategy of ADGM.
Umair Hameed, Financial Services Advisory Partner, KPMG, said “It is very encouraging to see ADGM’s initiative bringing together public- and private-sector entities to collaborate and drive innovation in the UAE. These collaborations are at the heart of the UAE’s FinTech strategy, to drive technological advancements across sectors.”