Regulatory authorities and banks in Abu Dhabi have recorded tangible benefits from trials of a shared Know Your Customer utility underpinned by distributed ledger technology.
An industry coalition, comprising Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Al Ansari Exchange, Al Fardan Exchange, First Abu Dhabi Bank, UAE Exchange and ADGM, was formed in February to develop a proof-of-concept to decide the governance framework and the functional requirements of an e-KYC utility.
The app developed for the test phase provides users with a single location where customer identification and verification can be performed once for a customer, with the validated data securely shared by other participants.
Richard Teng, CEO of the regulatory arm of ADGM, says the application represented a radical improvement over the current repetitive and cost-intensive approach to verifying customer bona fides.
“By harnessing the power of technologies such as blockchain, the e-KYC project has demonstrated tangible benefits that may be offered by an e-KYC utility for financial institutions in the UAE," he says. "In addition to enhancing KYC checks across the industry, the utility can achieve significant cost efficiencies and financial inclusion driven by unified KYC standards."
The next step in the project will see if the benefits can be extended to small and medium-sized businesses by easing access to banking services.