The Dubai International Financial Center (DIFC) and Mashreq Bank have together launched a blockchain-based data-sharing platform that will facilitate faster and easier know-your-customer (KYC) processes that will allow licensed businesses and corporates opening digital bank accounts instantly. The announcement of the platform’s launch came in a DIFC blog post on March 1st.
According to an official statement regarding the announcement, the platform is available to all corporations and banks based in the United Arab Emirates (UAE) and is thereby designed to expedite KYC processes for new companies looking to business in the UAE.
يسرنا أن نعلن عن بدء تشغيل أول منصة مشاركة بيانات في المنطقة للتعرف على العميل بتقنية بلوك تشين، ويأتي إطلاق مبادرة "التعرّف على العميل“ في إطار تحالف استراتيجي بين #مركز_دبي_المالي_العالمي وبنك المشرق في يوليو 2019 بالتعاون مع شركة نوربلوك الرائدة في مجال التكنولوجيا المالية. pic.twitter.com/nu2W1hD95w
— DIFC (@DIFC) March 1, 2020
DIFC and Mashreq, which formed a consortium in July of 2019, have already reportedly called on other banks and licensing authorities to become a part of the platform.
The launch “earmark[s] the beginning of a journey towards a broader vision” of blockchain-based systems
Arif Amiri, chief executive officer of DIFC Authority, said in the announcement that “this initiative provides financial institutions and businesses a platform in order to seamlessly undertake operations,” and that “as we enter a new period of growth and expansion, our core focus on fintech and blockchain are major steps on our journey towards transforming the future of finance.”
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Indeed, in April of 2018, the UAE Government launched the Emirates Blockchain Strategy 2021, an effort that is intended to “transform 50 percent of government transactions [onto blockchain platforms] by 2021,” per the UAE government website.
In addition to supporting the initiative, Ahmed Abdelaal, chief executive of Mashreq, said that the launch of the platform “earmark[s] 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.”
Here’s how it works
The platform has been designed such that DIFC will be responsible for preparing each KYC record during the application process for corporate licensing. With customer approval, the record will be shared via blockchain with Mashreq–and, eventually, with other relevant financial institutions and licensing authorities.
The blockchain platform itself was built by Norbloc, a fintech firm that was incubated by the DIFC. Multinational professional services network Deloitte supported Mashreq in designing the platform’s governance and program management, while multinational law firm Gowling WLG supported the drafting of legal agreements.
The platform has also been designed for scalability. Therefore, when designing the platform, Mashreq and DIFC were guided by principals that would facilitate large-scale adoption by participants of all sizes. These include various consortium governance models, ownership structures, technical considerations, participation criteria, and dispute management procedures.
While the KYC platform is the newest blockchain-based initiative to be released as part of the UAE’s Emirates Blockchain Strategy 2021, it isn’t the first: several other projects, including a document exchange platform known as the “Bank Trust Network” and a digitized trade project known as the “Digital Silk Road,” are already underway.