United Arab Emirates (UAE)’s Ministry of Economy has joined hands with the Arab Federation of Capital Markets (AFCM) to kickstart a challenge that encourages fintechs to create a know-your-customer (KYC) verification system based on blockchain technology.
Trustworthiness of Data on the Blockchain
The AFCM has, in conjunction with the UAE’s Ministry of Economy, launched a market innovation challenge wherein participants are expected to create a functional know-your-customer (KYC) blockchain system. The challenge, according to AFCM, is open to “enterprise-ready” fintechs and tech firms from the region and around the world.
Participants are expected to create a platform that “enable[s] transparency and immutability,” according to the AFCM. Such a KYC platform would, in turn, “allow financial institutions to validate the trustworthiness of data present in the distributed ledger technology (DLT) platform.”
In detailing its reasons for launching the challenge, AFCM, which is the guiding body for exchanges and clearinghouses from all around the Arab region, explains why it wants the winning KYC platform to be based on blockchain. AFCM said:
Blockchain will allow for an accumulation of data from multiple authoritative service providers into one 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.
AFCM added that such a system will likely offer better data security by ensuring only authorized persons can access the data.
Solving Problems With Disruptive Technologies
According to judging criteria, a participating fintech’s proposed solution “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 make it to the finals of the challenge, which is expected to end on March 29, 2022.
In addition to the UAE’s economy ministry, 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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