Title: Central Bank of Sri Lanka Successfully Tests Blockchain-Based Shared KYC System with Fintech Firms

Overview

The Central Bank of Sri Lanka (CBSL) has successfully completed the proof-of-concept (POC) testing for an industry-wide shared Know Your Customer (KYC) system using blockchain technology in collaboration with three leading fintech firms.

Key Developments

• CBSL held an event on October 25, 2021, to unveil the POC results to the Governor and other stakeholders.
• The successful execution of the pilot project was commended by the Central Bank’s top management.
• The participating fintech firms were Sampath Bank & University of Colombo School of Computing (UCSC), Yaala Labs & Linearsix, and Norbloc AB from Sweden.

Selection Process

• A rigorous selection process identified the three firms to develop the POC.
• Ten commercial banks, including major players like Commercial Bank of Ceylon and HSBC, collaborated to test the POC from June 2021.

Objectives of the POC

• Evaluate the benefits of digitizing the KYC process, including improved customer experience, reduced operational costs, and minimized operational risk.
• Understand the potential of blockchain technology in securely and efficiently sharing customer KYC information between banks.

Advantages of Blockchain Technology

• The findings from the POC highlighted significant advantages of using blockchain technology for a shared KYC process.
• Enhanced security and data privacy, as well as improved efficiency, were notable benefits.

National Pioneering Project

• This groundbreaking initiative represents a pioneering national project commissioned by the Central Bank of Sri Lanka.
• The Central Bank brought together the Banking and IT industries to explore the potential of blockchain technology and drive financial services innovation.

Conclusion

• The successful completion of the POC marks a significant stride towards digitalizing financial services and expanding financial inclusion in Sri Lanka.