Abu Dhabi Global Market leads e-KYC utility project in UAE
The Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM), has launched a electronic-Know-Your-Customer (e-KYC) utility project.
The initiative is launched in close collaboration with a key team of the UAE’s largest financial institution, including the Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Al Ansari Exchange, Al Fardan Exchange, First Abu Dhabi Bank, UAE Exchange and ADGM.
Together they will develop a proof-of-concept to decide the governance framework and the functional requirements of the e-KYC utility, with distributed ledger technologies being considered to underpin core functionality within the platform.
Richard Teng, CEO of the FSRA of ADGM said, “The immensely positive industry response reveals how seriously the region takes robust KYC and the material impact of ‘RegTech’ technologies in addressing industry challenges. Banks and financial institutions are seeking more ways to meet KYC and AML requirements and standards. With increased deployment of technology, such as blockchain for KYC and the efficient management of digital identities, greater efficiency and cost-effectiveness can be achieved.
ADGM has made a number of efforts to establish a conductive FinTech ecosystem, including being the first to establish a dedicated and open FinTech regulatory framework for the MENA region in November 2016. It also launched its Regulatory Laboratory (RegLab) – a regulatory sandbox – to provide a controlled environment for FinTech innovators to develop and test their products and services. ADGM RegLab currently has 16 FinTech firms with innovative solutions.
According to Global RegTech review, 89 companies in the market are providing KYC solutions, the second highest in the RegTech space. An analysis of the capital invested in RegTech companies according to the area of regulation addressed by their solutions, also revealed which pieces of legislation appear to be causing the most problems within financial institutions. Since 2012, 23.1% of all RegTech investments, which amounts to $878m, can be attributed to investments in KYC solutions according to data by RegTech Analyst.
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