Pakistan’s Securities and Exchange Commission today launched an innovative digital ‘Know Your Customer’ service using the International Bank Account Number system, promising to simplify access to capital markets and financial services across the country.
This innovative development allows investors and consumers to verify their identity through their bank account’s IBAN, eliminating the need for separate documentation and in-person verification at brokerage offices. This move marks a shift from traditional methods, such as biometric verification, making account opening in stock markets more efficient.
Simultaneously, SECP has amended the Anti-Money Laundering Regulations 2020. These amendments enable securities brokers, futures brokers, insurance companies, takaful operators, non-banking financial companies (NBFCs), and modaraba companies to verify client identity through the digital IBAN mechanism.
SECP Chairman Dr. Kabir Ahmed Siddiqui emphasized that this digital KYC initiative is a transformative step in modernizing the financial sector, aiming to make the investment process more accessible, secure, and transparent. He highlighted the significant role of technology in enhancing the facilitation and security of financial transactions.
SECP assures that this digital verification method is not only user-friendly but also fast and secure. By ensuring transactions only through the user’s verified bank account, transparency is enhanced, and the identification of financial matters is promoted.
Further amendments in regulations include advanced biometric verification features, such as facial recognition. Additionally, investment accounts linked to IDs blocked by the National Database and Registration Authority (NADRA) can be swiftly deactivated, enhancing security measures within the financial framework.