The Electronic Know Your Customer Project
Know Your Customer (KYC) is the process of identifying and verifying the client at the start of a business relationship and periodically thereafter. KYC requirements have been evolving for some time and they have become globally significant across various sectors. With issues pertaining to corruption, terrorist financing, and money laundering becoming so prevalent, KYC policies have become an important tool to combat financial crimes internationally. In Jordan, KYC procedures are largely paper-based and require the physical presence of the client. eKYC, on the other hand, refers to conducting the KYC procedure electronically and includes capturing information from IDs, the extraction of digital data from government-issued IDs, or the use of digital identities and facial recognition for online identity verification. eKYC is a remote, paperless process that minimizes compliance costs, bureaucracy, and risks associated with identity verification.
In its first three-year strategy, JoPACC is committed to advancing financial infrastructure and offering digital channels that will enhance the uptake and active usage of services and improve the seamlessness of the user experience. Thus, JoPACC is developing an eKYC project that envisions a unified financial identity service for individuals and businesses, which will enable financial institutions to digitally obtain required KYC information, therefore laying the stepping stones for ubiquitous access to financial services remotely, securely, and digitally. This project is considered a fundamental asset in the digital economy and financial inclusion ecosystem and will be implemented in cooperation with the Ministry of Digital Economy and Entrepreneurship under the supervision of the Central Bank of Jordan.
The primary stakeholders of the service are:
- All financial institutions licensed by the Central Bank of Jordan (Banks, payment service providers, system operators, exchange companies, Credit Bureau, Investment Funds, MFIs), as well as other entities licensed by the Jordanian Government (Mobile Network Operators, Insurance Companies...)
- Government agencies acting as identity data providers
- Private Sector companies including Telecommunication companies
- All citizens, residents, and refugees in Jordan
The project will enable consumers to establish a trusted proof of identity, through a combination of a set of KYC information required by the CBJ, and verify and validate individuals’ identity through the integration with Government sources holding trusted data.
In December of 2021, JoPACC signed a cooperation agreement with the Ministry of Digital Economy and Entrepreneurship, thereby kicking off the implementation of the project. As such, the first stage of the project, which is expected to be completed before the second quarter of 2022, involves all interested banks in Jordan accessing the trusted data held by the government, to complete the required due diligence, through JoPACC’s infrastructure. This, therefore, reduces redundancy and overall cost on Jordan’s financial sector.