The United Arab Emirates (UAE) is always coming up with innovative ideas to remain ahead of the curve. The establishment of Know Your Customer (KYC) blockchain platform by Dubai was also a step towards a digital future.
Currently, six banks are a part of KYC blockchain consortium which include: Emirates NBD, Emirates Islamic, HSBC Bank Middle East, national Bank of Ras AL Khaimah, and Commercial Bank of Dubai. Collectively, these six banks hold around 44 percent of the entire banking assets* within the UAE.
*This figure was last update on June 2019 and can vary depending on positive or negative performance of the listed banks.
Speaking about the matters related to economy, an analyst at Moody’s remarked:
We expect the KYC blockchain consortium to support the asset quality of UAE banks primarily by reducing operational risk. The platform will facilitate faster and more secure onboarding, and exchange of authenticated and validated digital customer data and documents through distributed technologies powered by blockchain.
“This will ensure improved compliance with local and international KYC regulations while reducing the risk of data theft. Non-compliance with KYC regulations, particularly for anti-money laundering and terrorist financing, can have material legal implications and result in sizeable penalties for banks. Theft of client data can cause material reputational damage,” he further added.
In addition to the already listed duties of the platform, it will also support regulatory oversight of banks’ collection and management of KYC data.
Mik Kabeya lastly added: “We also expect it to help credit risk management with better data for client underwriting and debt collection. The consortium will support the franchises and profitability of UAE banks by improving customer service through shorter turnaround times for customer onboarding, including opening a bank account. The platform will reduce the financial cost for banks of managing the paper-based KYC data of already registered companies.”