December 18, 2023 (MLN): The State Bank of Pakistan (SBP) has allowed banks to rely on third-party financial institutions for performing effective and efficient Know Your Customer (KYC) and Customer Due Diligence (CDD), the central bank notified the Presidents and Chief Executives of all banks on Monday.
To bring further efficiency to the KYC and the onboarding process, the Pakistan Banks Association (PBA), under the guidance of SBP, has undertaken the development of a “shared e-KYC platform.
This new platform will provide several benefits to banks including; timely exchange and updating of customers' KYC/ CDD information across the banking industry through a secure digital channel, standardization of KYC/ CDD data, enhancing customer onboarding experience and cost savings for the banks.
The “shared e-KYC platform” has been built on Distributed Ledger Technology (DLT) whereby customer KYC/CDD-related information shall reside with the banks only, without the need for a central entity to house this critical customer data.
Further, to protect the rights of the banks’ customers, the data will be accessed only with their explicit consent.
Given the importance and utility of this platform, both for banks and their customers, banks are advised to join the “shared e-KYC platform”, and dedicate the required financial, technological and human resources for its timely and effective implementation.
