PC: Arabian Business
Being a governmental initiative, the “Know Your Customer” (KYC) digital platform is an effort by the government of the UAE to transform its financial sector through transparency enhancement, strengthening compliance with regulations, and combating financial crime. This is part of the country’s strategy to modernise financial infrastructure and accelerate digital transformation.
Economic Trust and Leadership in Fintech
Under Federal Decree-Law No. 30 of 2024, the KYC platform establishes a safe system for the verification of a customer’s identity. By establishing confidence in the business and finance systems of the United Arab Emirates, the platform contributes to the economic stability and sustainability of the country. The platform also positions the banking and financial industries of the United Arab Emirates among the most advanced worldwide by incorporating cutting-edge technological solutions tailored to the financial, banking, and insurance sectors.
The platform supports the UAE’s global ambitions in fintech, building a robust mechanism of identity verification to enhance the transparency of financial transactions. This allows users to make informed decisions while complying with the financial regulations.
Data Security and Regulatory Framework
The platform will be governed by a strict legal framework in order to ensure the safe collection, storage, and sharing of customer information. A new company, under the terms of the Decree-Law, will manage operations on the platform, including the issuance of KYC reports, collaboration with data providers, and observance of national cybersecurity standards.
The law requires a guard against the loss, damage, or unauthorized access of customer information. Explicit consent is required for data usage or sharing and customers have the right to access their KYC reports under the Central Bank.
Harsh Penalties for Breaches
The KYC platform stipulates stern penalties in case data confidentiality is violated. Unauthorised disclosure of customer data or making an attempt to acquire a KYC report fraudulently can result in a minimum of two years imprisonment along with an amount of penalty AED 50,000 ($13,600). Misappropriation of data by government employees or workers of the managing company is an aggravating offence.
Regulatory Oversight by Central Bank
The UAE Central Bank will regulate the platform’s management company and set the standards for data processing and security. It will oversee the activities of data providers and users, define acceptable data usage, and ensure compliance with established guidelines.
The launch of the KYC digital platform puts the UAE on a path to modernisation of its financial sector. It not only reinforces the country’s leadership in banking but also amplifies its status on the global stage of fintech hubs.
