Pakistan Banks Go Blockchain for Better Customer Experience and AML
The Pakistan Banks' Association (PBA), consisting of 31 conventional banks operating in Pakistan, has agreed to create a blockchain-based platform for Know Your Customer (KYC) procedures.
According to the Daily Times, the PBA signed a contract on March 2 to build the country’s first national eKYC banking platform that uses blockchain technology, which will assist in improving Anti-Money Laundering (AML) capabilities and combat terror financing, a project led by the State Bank of Pakistan (SBP).
The PBA includes well-known international banks like Citibank, Deutsche Bank, and the Industrial and Commercial Bank of China. The main goal of the blockchain platform is to improve operational efficiency, especially during the onboarding process, resulting in a better customer experience.
The Avanza Group has been chosen to develop the eKYC platform, dubbed “Consonance,” which will allow member banks to share and standardize customer information via a decentralized and self-regulated network. However, banks may only access the customer data with their consent, enabling them to evaluate new and existing clients.
Pakistan recently enacted new laws to introduce a central bank digital currency (CBDC) by 2025, joining other nations in the CBDC race. According to the new laws, electronic money institutions will receive licenses from the SBP for CBDC issuance.
Deputy Governor of SBP, Jameel Ahmad, praised the regulations, stating that they demonstrated the bank’s commitment to openness, technology adoption, and financial system digitization.