The Dubai International Financial Centre, a special economic jurisdiction within the city of Dubai, and Mashreq Bank today announced the launch of the region’s first distributed ledger blockchain data-sharing platform designed to implement Know Your Customer.

That’s the regulatory compliance identity process that supports business and corporate enterprise. This platform is a market-first of its kind in the Middle East and represents the continuation of a consortium formed in July between DIFC and Mashreq Bank with support from the DIFC-incubated financial technology firm Norbloc AB.

DIFC and Mashreq focused on this technology to enhance both the quality and integrity of corporate KYC information as well as the quality of customer experience when opening a bank account. DIFC hopes that this will complement the ease of doing business in its jurisdiction.

Know Your Customer, alternatively Know Your Client or KYC, is a process whereby a business verifies and accesses potential customers of financial services. It is a method of determining the potential liability of taking on a particular customer while also complying with local regulations regarding the tracking of financial information and activity for customers, employees, consultants, agents and other business clients. It is a term widely used as part of anti-money-laundering regulation.

“We place a high importance on strategic collaboration with industry-leading financial institutions as part of our commitment to Emirates Blockchain Strategy 2021,” Arif Amiri, chief executive of DIFC Authority. “That will accelerate seamless transactions and improve the efficiency of working processes for government entities and professionals at the centre.”

The Emirates Blockchain Strategy is part of a larger initiative by Dubai to become a completely paperless government by 2021.

DIFC will prepare KYC records during corporate license applications, which will then be shared with Mashreq electronically via blockchain. Using the blockchain’s own tamper-resistant technology, DIFC expects that this will lower errors and provide a reliable provenance for identity chains and the presence of a single solution for KYC and identity will provide a scalable but highly interconnected system for tracking this information.

DIFC and Mashreq also believe using this technology will significantly lower the amount of time it takes for customers and clients to open bank accounts. This is because the blockchain system will automate many parts of the paperwork verification and distribution process that generally slows down initial and subsequent account creation.

“This program aligns with the UAE Blockchain Strategy 2021,” Ahmed Abdelaal, chief executive of Mashreq Bank. “[This earmarks] the beginning of a journey towards a broader vision of forming a Consortium of Banks, Government Bodies as well as other Licensing Authorities, for seamless sharing of customer KYC data, thus leading to increased transparency, added security and a better customer experience.”

This single KYC solution for corporate entities is currently available to all qualified financial institutions and licensing authorities and supports connectivity with other similar initiatives.

DIFC and Marhreq also invite other banks and licensing authorities to join this new ecosystem for KYC data. This new technology platform and architecture will provide paperless, automated protocols with faster, more secure and more efficient capabilities than the current onboarding and verification procedures with enhanced transparency.

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