Financial Crime World

MALDIVES MOVES TO STREAMLINE KNOW YOUR CUSTOMER REQUIREMENTS WITH NEW e-KYC FRAMEWORK

Introducing a More Efficient Cashless Payment System

In a bid to boost cashless payments and improve access to financial services for its small businesses, the Maldives Monetary Authority (MMA) has developed an electronic Know Your Customer (e-KYC) framework.

The Need for e-KYC Framework

The majority of banks in Maldives have not systematically implemented online onboarding procedures, resulting in inconsistent methods being employed by different institutions. This led to inefficiencies and barriers to using formal financial products and services. To address this issue, MMA undertook the development of an e-KYC framework that would provide a standardized approach to consumer due diligence.

Key Features of the e-KYC Framework

  • Tiered Approach: A tiered approach to consumer due diligence allows financial institutions to use simplified procedures for lower-risk customers.
  • Standardized Procedures: The new e-KYC framework provides a standardized approach to consumer due diligence, reducing inconsistencies between institutions.
  • Reducing Transaction Costs: By streamlining the process, transaction costs are reduced, making it easier for small businesses to accept cashless payments.

Benefits of the e-KYC Framework

  • Improved Efficiency and Security: The e-KYC framework is expected to improve the efficiency and security of digital financial transactions in Maldives.
  • Promoting Financial Inclusion: By providing a standardized approach, financial inclusion among citizens is promoted, especially for small businesses catering to foreign visitors.

Virtual Peer Learning Sessions

MMA benefited from virtual peer learning sessions with regulatory institutions in Thailand, Malaysia, the Philippines, and Vanuatu. These sessions provided expertise on implementing e-KYC systems and national payment systems, enhancing the development of the e-KYC framework.

The Future of Cashless Payments in Maldives

The introduction of the e-KYC framework is a significant step towards boosting cashless payments and improving access to financial services for small businesses in Maldives. With its economy heavily reliant on tourism, the ability to accept cashless payments is crucial for these businesses.