Pakistan’s Banking sector aims to use a decentralized and self-regulated network. The network will base on blockchain technology. Banks in Pakistan to implement by launching an electronic platform for conducting nationwide know-your-customer procedures. The system will enable the banks to share customers’ personal information.
PBA announced that officials such as its Chairman Muhammad Aurangzeb and Avanza Innovations’ CEO Waqas Mirza attended the signing ceremony. The event took place on Thursday at the organization’s office in Karachi.
The banks in Pakistan are considering using blockchain technology for conducting KYC
Pakistan Banks’ Association (PBA) has contracted Avanza Group to develop a blockchain-based KYC (Know Your Customer) platform. The group has a consortium of companies specializing in advanced banking applications, customer experience management solutions, blockchain, and artificial intelligence.
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The initial phase will involve multiple banks, including the three banks that participated in the proof of concept (POC) – ABL, MCB, and Meezan Bank. The regulatory body will add other banks on their level of preparedness.
As per a press release, the creation of an electronic KYC system is a part of the State Bank of Pakistan’s (SBP) ongoing initiatives to reinforce the country’s anti-money laundering (AML) and counter-terrorist financing (CTF) control infrastructure.
Consonance, Avanza’s e-KYC platform, utilizes blockchain technology and enables banks to share and standardize personal information through a “self-regulated and decentralized network,” subject to the customer’s consent.
The PBA claimed that data obtained through KYC checks performed by other participating institutions enable banks to assess both new and existing customers. The process will reduce onboarding costs and enhance customer experience during the account opening, ultimately promoting financial inclusion.
The PBA has organized educational sessions for its member banks to ensure they are fully informed about the advantages that eKYC can provide for the banking sector. Implementation of the shared eKYC capability necessitates external involvement and preparation. Thus requiring banks to be fully prepared to execute it efficiently and promptly.
In March of last year, SBP Governor Reza Baqir stated that he perceives limited practical applications for cryptocurrency. However, he did recognize the potential of blockchain technology in addressing various challenges. After the official document signing ceremony in January 2023, the eKYC project’s first implementation phase will begin in 2023.
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