Dubai Economy and Emirates NBD are now live on the UAE KYC Blockchain Platform, which is set to become a nationwide ecosystem for exchange of verified customers’ data.
The initiative facilitates secure digital customer onboarding, instant bank account functionality and sharing of verified KYC - or Know-Your-Customer - data between licensing authorities and financial institutions through blockchain technology, Dubai Economy and Emirates NBD said in a joint statement on Tuesday.
The platform, first announced in February this year, is supported by Smart Dubai and the Central Bank of UAE. Commercial Bank of Dubai, Abu Dhabi Commercial Bank, HSBC, and RakBank are also set to go live soon, the statement added.
“[The] platform is now production-ready with over 120 companies already instantly onboarded by Emirates NBD with active and operational bank accounts,” Omar Bushahab, chief executive of business registration & licensing sector at Dubai Economy, said.
“It is in alignment with the government’s vision around digitisation and [being] paperless,” he added.
During the first phase of the initiative, Dubai Economy migrated all active trade licences onto the blockchain platform, accounting for more than 40 per cent of all active trade licences in the UAE. In addition to receiving new leads to open bank accounts, participating financial institutions will be able to receive real time updates made to customers’ data.
Emirates NBD is the first bank to go live on the platform with its “initial use case”, enabling companies – primarily small and medium-sized enterprises – to onboard digitally and instantly open a bank account through Emirates NBD’s E20 Digital Business Bank.
“The next milestone will be the go-live of Emirates NBD’s additional use cases and of our remaining banking partners along with the official release of the Consortium Agreement that will govern the ecosystem and outline how data will be shared between consortium members,” Mr Bushahab said.
“We are also in advanced discussions with a second wave of financial institutions and free zones to further expand the initiative,” he added.
Earlier this year, Moody's Investors Service said that the move to introduce the UAE KYC Blockchain Platform is credit positive for lenders in the country.
“We expect the KYC blockchain consortium to support the asset quality of UAE banks primarily by reducing operational risk,” the ratings agency said.
“The platform will facilitate faster and more secure on-boarding, and exchange of authenticated and validated digital customer data and documents through distributed technologies powered by blockchain.”
Moody's said that the new platform will improve compliance and reduce the risk of data theft.