In Pakistan, banks intend to launch an electronic platform for “Know Your Customer” (KYC) procedures. This platform will allow the identification of the customer at the national level. The innovation here is that the system will be blockchain-based. Using what they call a decentralized, self-regulating network, they will exchange customers’ personal information.
What advantages does this new KYC identification system bring?
The Pakistan Banks’ Association (PBA) has signed a contract with Avanza Group. The objective is the development of a shared Know Your Customer (KYC) solution based on the blockchain. It will allow a bank to share all customer KYC data collected by its compliance department. bitcoin news notes that the client’s consent will be requested before sharing.
Avanza’s ‘Consonance’ eKYC platform will thus standardize KYC processes. For the consumer, the advantage is that the processes for obtaining a mortgage will be simpler. Indeed, since his KYC data will be shared, he will not have to create a new file from one bank to another.
Then, for banks, shared KYC allows a massive reduction in the cost of collecting customer data. It also helps to get new customers faster.
The Blockchain to fight against money laundering?
This new project is part of many efforts by the State Bank of Pakistan (SBP) to combat money laundering. It also intends to put an end to the financing of terrorism.
” In addition to strengthening AML controls, the deployment of this platform will bring efficiencies to participating banks and result in an improved customer experience.“, detailed the PBA, which oversaw the project on behalf of its members.
Some believe that there are risks of a single bank introducing faulty KYC data into the entire banking system. This could disrupt the entire anti-money laundering process. Each bank will therefore still have to carry out basic checks to ensure the reliability of the data.
In March last year, Reza Baqir, Governor of the State Bank of Pakistan said that he does not find much use in cryptocurrencies. He had all the same specified that the Blockchain could solve several problems. Could we therefore move towards a abandonment of purely speculative cryptocurrencies ?
Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of daily and weekly so you don’t miss any of the essential Tremplin.io!
