Acoording to a press release dated 4th December, thehe international financial free zone within, Abu Dhabi, the capital of the United Arab Emirates (UAE) has completed the first phase of its blockchain-based Know Your Customer (KYC) utility project.
Regulatory body of Abu Dhabi Global Market (ADGM), the Financial Services Regulatory Authority (FSRA) in collaboration with audit firm KPMG have published a review, which provides the details of the successful conclusion of the first phase of the project to provide key takeaways for members of the financial industry.
The review describes the development of the project which took a period of four months, in association with major UAE-based financial institutions – including Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, First Abu Dhabi Bank and others.
FSRA described the legacy KYC systems as “cumbersome, repetitive and cost intensive,” which leads to inefficient information sharing systems between siloed data sets, hampering KYC compliance and anti-money laundering monitoring by the financial institutions.
The blockchain-based system instead, aims to “radically simplify” the KYC process by recording an “immutable audit trail, seamless and secure data sharing.” This will allow individual clients to decide how their personal data is being shared in the utility, keeping in mind the data protection (GDPR) and customer consent requirements.
As per the review, this new system will use cryptography and digital signatures, among other features, to establish a secure, unified, and convenient system for upholding robust KYC standards across the industry.
The possibility of developing a commercial model of the project has also been proposed by the review, which aims to provide a fee-based rewards system that will be plausible incentives for data contributors to uploade and update their data. It will also charge data consumers for access.
The FSRA revealed that it was now planning to launch the next phase of the project which will be to facilitate small and medium enterprises’ access to banking services.