Abu Dhabi Global Market successfully trials blockchain-based e-KYC solution

Abu Dhabi Global Market (ADGM) has successfully completed the first phase of a blockchain-based electronic know your customer (E-KYC) utility project.

Launched in March 2018, the project was conducted in collaboration with the Financial Services Regulatory Authority (FSRA) of ADGM, KPMG, and a number of the UAE’s major financial institutions including Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Al Ansari Exchange, Al Fardan Exchange, First Abu Dhabi Bank, and UAE Exchange.

The consortium aimed to develop a proof-of-concept (PoC) to test operational and technological models of the e-KYC utility.

ADGM explained that the existing KYC and customer onboarding process are cumbersome, repetitive and inefficient. The eKYC utility project aimed to address these challenges by providing a centralized solution where customer identification and verification would be performed only once for a customer, instead of several times by different entities for the same customer.

The solution leverages blockchain technology and provides “immutable audit trail, seamless and secure information sharing, GDPR compliant, use of digital signatures, customer consent model.”

According to the official release, the project members were able to successfully share and validate simulated KYC documentations and data updates about the client on the prototype in a secure environment, supported by blockchain technology.

“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,” Richard Teng, CEO of the FSRA of ADGM said.

“In addition to enhancing KYC checks across the industry, the utility can achieve significant cost efficiencies and financial inclusion driven by unified KYC standards.”

Building on the success of the first phase of the project, the FSRA is planning to commence on the next phase to facilitate small and medium enterprises’ access to banking services.