HSBC has announced that it has successfully onboarded to the UAE Know Your Customer (KYC) Blockchain Platform founded by Dubai Economy, making it the first overseas bank and fourth founding member of the platform to go live.
With HSBC’s addition to the platform, investors will be offered the option of digitally opening an account with the international bank using data that has already been verified by another bank, with sharing enabled between banks on a P2P basis via a blockchain solution.
Identity verification is a lengthy and costly process, often requiring banks to outsource client data validation to big accounting consultancies. The platform allows banks to reroute the process of identity verification.
Powered by norbloc’s Fides blockchain, the Consortium was founded in February 2020 to facilitate the secure exchange of verified KYC data between banks and licensing authorities in the UAE.
Because banks can access verified KYC data, customers won’t have to enter all the data themselves. Instead, they can agree to share their data.
For HSBC and other banks, this reduces the onboarding time for new customers. For corporate customers, KYC is an ongoing process, such as when a company moves office. The solution will help here as well.
“HSBC’s ambitious growth strategy in the UAE is underpinned by investment in digital infrastructures such as the UAE KYC Blockchain platform. By being able to access up-to-date KYC data directly from Dubai Economy, we will be able to serve customers faster and focus more on their core banking needs”, said Abdulfattah Sharaf, CEO of HSBC UAE.
Yet, there are potential legal liability issues involved in the sharing of data between banks. For example, what would happen if the data provided by another bank is wrong? Our understanding is that in the UAE, it’s the legal responsibility of the bank relying on the KYC. It’s up to the bank to what extent it relies on data from the platform without independent checks.
Other members of the UAE platform are Emirates Islamic, Emirates NBD, Commercial Bank of Dubai, Abu Dhabi Commercial Bank, RAKBANK, Mashreq Bank and DIFC.