As per the latest reports on Oct 26, the International Finance Corporation is likewise establishing a safe & secure digital banking structure and improving financial considerations of all sections of Bangladesh’s populace under an arrangement marked on Monday.
According to the officials, IFC which is a crucial lending source consented to a collaboration with Bangladesh Financial Intelligence Unit (BFIU) for applying & increasing the electronic Know Your Customer (eKYC) project.
“Under the agreement, IFC and BFIU will operate together to create and adjust eKYC framework, which is a fundamental administrative course of action for performing client due diligence during new customers onboarding processes for gathering and checking client information electronically”, According to a statement on the deal and its goals.
A proficient digital onboarding framework is billed as one of the essential building blocks for the quicker tracking of financial inclusion in Bangladesh.
Under the current KYC protocol for opening new accounts, customers are required to introduce their national identity (NID) cards personally and financial institutions (FI) must verify and keep a record physically copying and printing the NID.
“The process is time-taking, expensive, and stress-free for both customers and FIs.” The statement says about the value of change from the conventional to the oncoming high-quality banking and financial transactions that are focused on involving all unbanked people.
Additionally, in-person account opening has become more troublesome amid the Covid-pandemic and the advancement of eKYC will help in social distancing while at the same providing all-weather banking.
Once set up, the eKYC framework won't just reduce the time and expense of customers on loading yet, in addition, assist with attracting more customers digitally, thus, eliminating the number of unbanked individuals, especially the underserved like small business owners and women entrepreneurs.
This project will help in the financial inclusion goals of the government of Bangladesh as well as IFC’s agenda of including an extra 30 million unbanked adults in the country by 2030.
BFIU, an independent government agency accused of exploring dubious transactions and money laundering, is also the central agency for guaranteeing KYC/eKYC compliance, implied for frustrate fraud and several monetary wrongdoings.
Under the IFC cooperation arrangement, the BFIU is likely to issue an inclusive eKYC administrative guideline for the financial sector by December 2024.
Apart from setting up an administrative framework, the eKYC task will likewise convey data analytics, case studies, information creation, and spread awareness on the financial market.
The IFC estimates that 500,000 people will be included by the e-KYC framework by the end of the project incorporation period in 2025.
“Financial sector, especially financial institutions, are encountering a serious process of digitization. This digital transformation allows easy access of clients, even from a remote location, into the financial services.” According to Md. Masud Biswas, Executive Director and Deputy Head of BFIU. There is no doubt that digital trade finance is essential for global traders to survive in a post-pandemic economy.
He figures this might represent some fundamental dangers of illegal tax avoidance, terrorism funding, and associated criminal activities by manhandling financial institutions and services.
“To limit such dangers of the financial sector, e-KYC can be one of the most ideal solutions,”. He explained the event of arrangement signing.
“Supporting financial inclusion is one of the needs for IFC's work in Bangladesh,” explained Qamar Saleem, IFC's Regional Manager, Advisory Services, for Financial Institutions Group in Asia and the Pacific.
He trusts the execution of the eKYC foundation will offer a consistent experience for end clients and back the financial sector to reach out to last-mile customers in Bangladesh, significantly increasing access to financial services.
The IFC helps advance financial inclusion through investments in the financial sector, advisory services to investment customers and other private-sector customers, and advisory services to stakeholders in financial infrastructure.
Before the change from manual KYC to digital eKYC, BFIU showed small-scale testing by opening 1500 accounts using eKYC technology, such as biometrics, and the results affirmed its effectiveness.