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Bahrain’s standardised blockchain verification technologies helped local businesses digitise their operations much faster than neighbours like the UAE after the start of the Covid-19 pandemic, an online discussion panel heard recently. Bahrain’s Information and eGovernment Authority (IGA) and the BENEFIT company launched the national digital identity and the electronic Know-Your-Customer (eKYC) platform in April last year, while the UAE is currently in initial stages of standardising its national UAE Pass service.
According to Abdulwahed AlJanahi, chief executive of BENEFIT, the system was a part of the organisation’s vision to go cashless, with solutions in the pipeline when the pandemic began. The lockdown served as a catalyst, resulting in Fawri and Fawri+ transactions doubling since the start of the year.
Built on the blockchain system of data verification, the eKYC platform brings together the national digital identity database with a number of technologies to securely verify identity and share data digitally. It is the foundation of mobile-app based onboarding processes launched by banks like ila Bank as well as business verification for value-added services like Talabat.
According to a January 2020 report by the Arabian Monetary Fund, security measures include:
l Digital authentication of customer identity using National eKYC, Biometric Fingerprint and Facial recognition.
l Customer consent to retrieve and share KYC data and documents.
l Maker checker process for customer on-boarding which involves at least two staff in any financial institution to complete customer on-boarding.
l Maker checker process to create any user on the platform.
l Regular audit logs shared with the regulator.
l Immutable KYC records on the blockchain.
l The platform operator has no access to KYC records.
While this is centralised and nationalised in Bahrain with the IGA acting as the custodian of the collected information, the UAE Pass system has yet to be universally deployed as a viable eKYC solution. Many financial institutions have their own insulated KYC systems, which has inhibited third party service providers from rolling out their services efficiently.
Tarek Ghobar, co-founder of Dubai-based payments start-up PointCheckout, considers this a bottleneck and commented: “We had to go vendor to vendor to verify and onboard them. A centralised eKYC could have helped quicken the pace of adoption and helped more vendors utilise our platform faster.”
Meanwhile, merchants enrolling in BenefitPay more than doubled, jumping from 386 in Q4 of 2019 to 798 in the first quarter of 2020, bringing the total participating stores to over 3,000.