The Pakistan banks association plans to use blockchain to implement know-your-customer policies. It will be a significant step for the country’s banking industry because they have never been known for being on top in technology. The banking association signed a project contract on March 2nd to build a blockchain-based eKYC platform, reported the daily times.
Significance of this move
Pakistan doesn’t have a good reputation regarding terrorism control and global peace. However, with this new KYC mechanism, the banks could improve their anti-money laundering capabilities and counter-terrorism. This comes under a new initiative that the State bank of Pakistan is leading. Many other banks and international organisations are also participating in this initiative. It includes Citibank, Commercial Bank of China and Deutsche Bank.
Apart from this, implementing blockchain will also put Pakistan at the forefront of innovation. It will even improve operational efficiencies and speed up and optimise the customer onboarding experience. Overall, it will be a major net positive for the banks of Pakistan.
The authorities in Pakistan have delegated the task of building the blockchain-based eKYC platform to Avanza Group. They plan to name the platform “Consonance”, and banks will also use it to exchange customer data in a standardised manner. However, customers will be asked for permission on whether they would want to share their information with other banks.
Benefits of using blockchain
- Increased security: Blockchain is a highly secure system that uses cryptography to prevent unauthorised access and tampering. By using blockchain, banks can protect their data and transactions from hacks and fraud.
- Improved efficiency: Blockchain can streamline the banking process by eliminating the need for intermediaries and reducing the time it takes to process transactions. This can lead to faster and cheaper bank and customer transactions.
- Lower costs: Blockchain can reduce the costs of maintaining a traditional banking infrastructure, such as data storage and processing. This can help banks save money and provide better services to their customers.
- Increased transparency: Blockchain provides a transparent and auditable record of transactions, which can increase trust and accountability between banks and their customers.
What are your thoughts on Pakistan banks using blockchain to improve KYC mechanism? And do you think they will be able to build the platform? Let us know in the comments below. And if you found our content informative, share it with your family and friends.
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