Page 10 - NIBAF-Training Matters January-March 2021
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checks (biometric and facial recognition to name providers, while establishing trust, reducing cost and
two), there still need to be mechanisms to mitigate ensuring compliance with the regulations.
impersonation risk and flagging high risk customers. In the perspective of Pakistan as well as other
Further, there was a need to have national level developing countries there is a dual challenge of
alignment among regulators especially regarding FATF compliance as well as low financial inclusion.
data sharing, analyzing and using in the context of Generally, for these economies cash is still king with
risk management AML/CFT, cyber security and about 40% of all transactions being carried out
customer privacy perspective. Therefore, critical through cash which remains a challenge in financial
implementation considerations for onboarding are inclusion. The State Bank, however, has remained
integration of new technology to existing systems, responsive to the situation – more in context of
integration with third parties (national database financial inclusion – and issued regulations for
and solutions providers), compliance with financial allowing agent banking and branchless banking as
crime related regulations (FATF), data protection early as in 2008. More recently, Roshan Digital
and cybersecurity and data governance. Digital Accounts were launched for digital onboarding
channels powered by smart devices balance especially for investors abroad. The challenges
security with user experience to ensure both faced by State Bank of Pakistan are primarily
compliance to regulations (especially for KYC related to AML/CFT, compliance to KYC, privacy
verification, AML screening) and customer and data security. With the fast pace in
satisfaction.
technological advancements, central banks need to
With the pace of technological developments, become more agile to keep pace with technological
checking for ID frauds had become a challenge. developments and need a cultural and competency
Using Block chain technology for creating individual shift. To develop the entire digital ecosystem it is
digital IDs integrating information from numerous critical for all government departments and their
organizations (e.g., educational, financial etc.) can regulations to evolve and provide a unified
be valuable. This will ensure privacy and user architecture inclusive of proper cloud frameworks,
consent when interacting with other service outsourcing arrangements and regulatory reforms
especially with respect to open banking.
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