Pakistan Banks Develops Blockchain-Based KYC Platform
The Pakistan Banks’ Association (PBA), a group of 31 traditional banks operating in Pakistan, has signed up for the development of a blockchain-based Know Your Customer (KYC) platform. The measure aims to strengthen the country’s ability to combat money laundering (AML) and at the same time counter terrorist financing – an initiative led by the State Bank of Pakistan (SBP).
As reported by the Daily Times, PBA signed a contract on March 2 to develop Pakistan’s first blockchain-based national eKYC banking platform. Avanza Group has been tasked with developing the blockchain-based eKYC platform called “Consonance”, which will be used by the member banks to standardize and exchange customer data via a decentralized and self-regulated network. This will enable the banks to assess existing and new customers, and share customer information based on consent.
The member banks of the PBA include international businesses such as the Industrial and Commercial Bank of China, Citibank and Deutsche Bank. The blockchain platform will improve operational efficiency, primarily aimed at improving the customer experience during onboarding.
Along with other countries in the race to develop a central bank digital currency (CBDC), Pakistan recently signed new laws to ensure the launch of a CBDC by 2025. The SBP will issue licenses to electronic money institutions for issuing CBDC. “These landmark regulations are a testament to SBP’s commitment to transparency, use of technology and digitization of our financial system,” said SBP Deputy Governor Jameel Ahmad.
The use of blockchain technology for KYC purposes brings a number of benefits to the banking industry, including reduced costs and increased security. The development of Pakistan’s first blockchain-based national eKYC banking platform is a significant step towards the country’s digitization of the financial system. By standardizing and sharing customer data, Pakistan’s banking industry will be better equipped to combat money laundering and terrorist financing, while improving the customer onboarding experience.
Overall, the development of the blockchain-based KYC platform demonstrates PBA’s commitment to providing members with cutting-edge technology to improve operations and customer experience. The move also reflects Pakistan’s willingness to embrace blockchain technology as a means to strengthen its financial system and fight financial crime.
