The United Arab Emirates (UAE) Ministry of Economy has partnered with the Arab Federation for Capital Markets (AFCM) to launch a challenge that encourages fintechs to create a Know Your Customer (KYC) verification system ) based on blockchain technology.
Reliability of data on the Blockchain
The AFCM has, in collaboration with the UAE Ministry of Economy, launched a Marketplace Innovation Challenge in which participants are expected to create a working blockchain know-your-customer (KYC) system. The challenge, according to the AFCM, is open to fintechs and “enterprise-ready” tech companies from the region and around the world.
Participants are expected to create a platform that “allows[s] transparency and immutability”, according to the AFCM. Such a KYC platform would, in turn, allow “financial institutions to validate the reliability of the data present in the Distributed Ledger Technology (DLT) platform.”
Detailing its reasons for launching the challenge, the AFCM, which is the governing body of exchanges and clearinghouses across the Arab region, explains why it wants the winning KYC platform to be blockchain-based. AFCM said:
The blockchain will allow an accumulation of data from multiple authoritative service providers into a single cryptographically secured database. KYC verification through this type of architecture has the ability to be faster, more secure and more efficient than current verification procedures.
The AFCM added that such a system will likely provide better data security by ensuring that only authorized people can access the data.
Solve problems with disruptive technologies
According to the judging criteria, the solution proposed by a participating fintech “must solve the problem using disruptive technologies”. The proposed solution must also be relevant to the problem statement and be compatible with local regulations. Only five fintechs will qualify for the challenge final, which is set to end on March 29, 2022.
Apart from the UAE Ministry of Economy, the country’s securities regulator, the Securities & Commodities Authority (SCA), is also listed as AFCM’s other strategic partner for this challenge.
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