Group of UAE banks formed consortium to trial e-Know-Your-Customer scheme
Abu Dhabi Global Market concludes FinTech banking pilot
Abu Dhabi Global Market, the emirate’s financial centre, concluded the first phase of a pilot project under which digital technology is used to help banks meet regulatory requirements, it said on Tuesday.
The electronic Know-Your-Customer initiative aims to make it easier for UAE banks to comply with global KYC rules to combat money laundering and other financial crimes.
“By harnessing the power of technologies such as blockchain, the e-KYC project has demonstrated tangible benefits that may be offered for financial institutions in the UAE,” said Richard Teng, chief executive of the Financial Services Regulatory Authority, the regulator of ADGM.
“In addition to enhancing KYC checks across the industry, the [scheme] can achieve significant cost efficiencies and financial inclusion driven by unified KYC standards.”
The use of digital platforms “to share information, transact and test solutions” forms an integral part of ADGM’s strategy to develop the emirate’s FinTech (financial technology) industry, Mr Teng added.
FinTech is disrupting traditional financial services by deploying advanced technology, such as digital ledger platform blockchain, to speed up transactions, cut costs, improve accuracy of transaction monitoring and better serve customers.
Arabian Gulf financial centres are launching programmes such as start-up accelerators to stimulate growth of FinTech, and initiatives to encourage take-up by financial institutions and to help diversify their economies.
ADGM’s e-KYC project was launched in March in conjunction with professional services firm KPMG. The pilot consortium comprised major UAE banks and remittance houses including Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Al Ansari Exchange, Al Fardan Exchange, First Abu Dhabi Bank and UAE Exchange.
The objective was to develop a blueprint to test operational and technological platforms to enable digital compliance with KYC rules. The FSRA also developed a governance framework and business model for such platforms to operate.