Moody’s Investors Service said that the new blockchain-based platform for Know Your Customer (KYC) in the UAE is credit positive for country’s lenders.
According to The National, the ratings agency has said that the platform will support banks’ asset quality and improve profitability.
Cryptolydian reported last week, the Department of Economic Development (DED) has formed a blockchain-based consortium with six leading banks, holding nearly 45% of total banking assets in the UAE, as part of nation’s continuous efforts to boost the blockchain industry.
The six banks in the consortium include Emirates NBD, Emirates Islamic (the Sharia-compliant subsidiary of Emirates NBD), HSBC Bank Middle East, The National Bank of Ras Al Khaimah, Abu Dhabi Commercial Bank and Commercial Bank of Dubai.
UAE’s KYC Platform To Improve Compliance
According to Moody’s, the new KYC platform will improve compliance with local and international regulations, while keeping customer data secure, Moody’s says:
“We expect the KYC blockchain consortium to support the asset quality of UAE banks primarily by reducing operational risk. The platform will facilitate faster and more secure onboarding, and exchange of authenticated and validated digital customer data and documents through distributed technologies powered by blockchain. This will ensure improved compliance with local and international KYC regulations while reducing the risk of data theft.”
Customer Data Secured Against Breaches
Using blockchain technology can also help prevent data breaches, as explained by Moody:
“The platform will support regulatory oversight of banks’ collection and management of KYC data. We also expect it to help credit risk management with better data for client underwriting and debt collection.”
Moody’s also expects many organizations in the region to eventually enter the program, which it says “has the potential to become an important component of the country’s digital ecosystem”.
The KYC framework will be built in collaboration with blockchain technology and apps provider Norbloc, and is scheduled to roll out in the first quarter of 2020.
The KYC platform will be developed in partnership with blockchain platform and applications provider Norbloc and is expected to roll out in the first quarter of 2020.