On May the 1st, Fenergo began deploying a nation-wide solution for KYC purposes in the Kingdom of Bahrain. The solution, Benefit, will leverage Blockchain technology and will instantly aid the completion of KYC and AML processes for the financial institutions that subscribe to it. Customers’ identity will be verified through Bahrain’s national identity cards system, and after centralising all data in a cloud-based system, it will be instantly linked to the KYC “hub”. But it’s not just Bahrain – Abu Dhabi has conducted trials and reported high tangible benefits over DLT shared customer data. It seems like the Middle East has joined the Technology Revolution, and is prepared to go all in on this bet for innovation.
Albeit Bahrain has a population of 1.6M while the UK has one of 66M. It is admirable to see how this initiative has taken off to allow for the disruptiveness of a common layer of data. A smaller, scalable approach would be conducting a proof of concept in the UK. This way, we could analyse the cost-benefit of implementing this initiative across the industry. By harnessing the power of technology we can now reduce risk, enhance agility and share the cost of the KYC & AML processes to provide a more sound financial system. The first step is to create a network of companies that wish to invest and participate in a scalable project in providing back-office support for the financial system. The provision of ancillary services is not new – but it is the involvement of national databases and Central Banks as a verification tool that is ground-breaking.
There is controversy around this matter because a common national repository might pose a threat to national security. If hacked, it would be more devastating than one bank being cyber-attacked. The engineering behind the safety of the technology is not difficult to understand but perhaps harder to believe. It is for this reason that the King of Bahrain was the first person to attempt a log-in to register details, leading by example and hinting to the dedication to the project. The initiative shown should allow us to be rest assured that Blockchain technology is as safe for customers as it is disruptive for the market.