The Pakistan Banks’ Association (PBA), a group of 31 traditional banks operating in Pakistan, has signed off on the development of a blockchain-based Know Your Customer (KYC) platform. The move aims to strengthen the country’s Anti-Money Laundering (AML) capabilities while countering terror financing – an initiative led by the State Bank of Pakistan (SBP).
As reported by the Daily Times, the PBA signed a contract on March 2 to develop Pakistan’s first blockchain-based national eKYC banking platform. The Avanza Group has been tasked to develop the blockchain-based eKYC platform named “Consonance,” which will be used by member banks to standardize and exchange customer data via a decentralized and self-regulated network. This will enable banks to assess existing and new customers, and to share customer details based on consent.
The member banks of PBA include international establishments such as the Industrial and Commercial Bank of China, Citibank, and Deutsche Bank. The blockchain platform will improve operational efficiencies, primarily aimed at improving customer experience during onboarding.
Joining other countries in the race to develop a central bank digital currency (CBDC), Pakistan has recently signed new laws to ensure the launch of a CBDC by 2025. The SBP will issue licenses to electronic money institutions for CBDC issuance. “These landmark regulations are a testament to the SBP’s commitment toward openness, adoption of technology, and digitization of our financial system,” said Deputy Governor of SBP Jameel Ahmad.
The use of blockchain technology for KYC purposes offers numerous benefits to the banking industry, including reduced costs and enhanced security. The development of Pakistan’s first blockchain-based national eKYC banking platform is a significant step towards the country’s digitalization of its financial system. By standardizing and sharing customer data, Pakistan’s banking industry will be better equipped to fight money laundering and terror financing while improving customer experience during onboarding.
Overall, the development of the blockchain-based KYC platform demonstrates the PBA’s commitment to providing its members with cutting-edge technology to improve operations and customer experience. The move also reflects Pakistan’s willingness to embrace blockchain technology as a means of strengthening its financial system and combatting financial crimes.