The Bank of Jamaica (BOJ) is currently leading an initiative to develop a centralised electronic Know Your Customer (eKYC) public utility system, which will streamline and simplify the process for opening a bank account.
It will also make it easier for every Jamaican wishing to do so to be able to switch
their account to the bank offering the best services and products.
Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, made the disclosure during a statement in the House of Representatives, on Tuesday (July 9).
“In such a system, the customer information that is required for various banking transactions is stored digitally in a database that is kept securely and confidentially by a central trusted authority,” Dr. Clarke said.
“When a customer is conducting business with any financial institution, that institution can access the customer’s information immediately, verify that the person is exactly who they say they are, and complete their transaction in minutes, not days or weeks,” he added.
Dr. Clarke informed that the product is expected to be realised within the next two years, while adding that the system will achieve several objectives.
“By empowering account holders, it will boost competition within the banking sector, realise essential national digital and financial inclusion goals, while at the same time modernising regulatory oversight,” the Minister said.
He argued that this simplification will also boost compliance with anti-money laundering (AML) and countering the financing of terrorism (CFT) laws and regulations across the financial sector.
Dr. Clarke added that it also has advantages for commercial banks, as it will result in a significant reduction in operational and administrative costs related to compliance management.
“By collaborating with Deposit-Taking Institutions and utilising KYC information currently dispersed among public-sector entities, the BOJ will utilise opportunities presented by the 2019 amendments to the Proceeds of Crime Act. These amendments facilitate the sharing of KYC information across banks. As a result, the eKYC utility will streamline and expedite the processes of identifying, verifying, and maintaining customer identities within the financial services sector,” he said.
“This will greatly enhance customer experience and significantly improve AML/CFT compliance at both the entity and national levels,” he added.
Dr. Clarke further said that this initiative will boost competition in the banking sector, and thereby enhance the effectiveness of monetary policy, by enabling customers to easily move their accounts from one bank to another.
Meanwhile, the Finance Minister said the BOJ will be consulting widely with the financial sector, while adding that support for research and framework development is being provided by the World Bank.
He pointed out that the process will involve some necessary legislative changes and interagency collaboration to ensure success.
“The eKYC centralised registry represents a significant step forward in modernising Jamaica’s financial services sector. It offers substantial benefits across the board, from improving customer experiences to enhancing regulatory oversight and compliance. This initiative will ultimately contribute to a more competitive, efficient and secure financial ecosystem in Jamaica,” he said.
