Pakistan’s banks have decided to develop an electronic know-your-customer (KYC) platform. It is developed on blockchain technologies to assist the country in preventing money laundering. In while, the use of this technology by Pakistani banks is a beneficial step for the country’s financial industry.
The blockchain system is well-known for its transparency and security qualities. The Pakistan Bank Association (PBA) has signed a contract with Avanza Group, a firm that focuses on smart online banking and customer service technologies.
Pakistan is now suffering a financial meltdown. Additionally, terrorist attacks have occurred in multiple regions across the nation. The KYC platform aims to boost global anti-money laundering and counter-terrorism efforts.
According to a press release, Pakistan’s bank, in coordination with a Blockchain-based KYC platform, can aid in the reduction of fraud and increased compliance with regulatory requirements.
Pakistan isn’t the only country working with blockchain technology for KYC. It is also assisted by a couple of other banks and global organizations. Likewise, Citibank, Commercial Bank of China, Singapore, and Deutsche Bank are among its members.
Benefits to build Blockchain mechanism:
There are several potential benefits to building a blockchain system. Which include,
- This system can generate a secure and fully decentralized database that preserves all end-user interactions and payments.
- By using blockchain technology for KYC, Pakistani banks can reduce the costs and time involved in KYC processes.
- To develop trust because blockchain is based on a shared public ledger, it can facilitate the buildup of confidence among parties who may not know each other, such as in financial transactions.
- This makes it impossible for hackers to manipulate the database and speeds up processing times.
Overall, the implementation of blockchain-based e-KYC platforms is a great step forward for Pakistan’s banking industry. This project exemplifies how blockchain technology can be used in the future to improve AML controls, minimize onboarding costs, and improve client experience.
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