Development of an electronic Know Your Customer (e-KYC) framework 

	Country:	Maldives
	Member institution:	Maldives Monetary Authority
	Timeline:	December 2019 – May 2022
	Thematic area:	Digital financial services

Context 

Given the importance of tourism to the Maldives economy, it is crucial for small businesses to be able to accept cashless payments, as visitors are likely to use foreign payment cards. However, the majority of banks have not systematically implemented online onboarding procedures, instead employing inconsistent methods. It is also unclear whether insurance companies are properly identifying recipients of insurance payouts. 

The project sought to develop an e-KYC framework to introduce a tiered approach to consumer due diligence that would allow financial institutions to use simplified procedures for lowering the risk and minimize barriers to use formal financial products and services, and reduce transaction costs.  

Project Activities 

• MMA undertook the development of an e-KYC framework, a Regulation on Electronic Customer Due Diligence, and guidelines for reporting entities on electronic CDD. 

• MMA benefited from virtual peer learning sessions with the Central Bank of Thailand and Bangko Sentral ng Pilipinas, who provided insights on the implementation of e-KYC and national payment systems.  

• MMA learned from Bank Negara Malaysia about Islamic Finance, and from Reserve Bank of Vanuatu about their Secured Transaction Registry System.  

Outcome 

This project led to the development of an e-KYC framework, guiding documents and regulations which will improve the efficiency and security of digital financial transactions. Peer learning sessions and knowledge sharing with regulatory institutions in Malaysia, Thailand, the Philippines, and Vanuatu all helped the MMA in advancing the digital financial landscape in the Maldives.