28 July 2020

On 30 June 2020, Bank Negara Malaysia (“BNM”) issued an electronic know-your-customer (“e-KYC”) policy document (“Policy Document”). The Policy Document aims to accelerate and streamline practices of industry players in their adoption of e-KYC technology, the online process of identifying and verifying individual customers.

The Policy Document is applicable to the following financial institutions:

  1. a licensed bank, investment bank and life insurer under the Financial Services Act 2013 (“FSA 2013”);
  2. a licensed Islamic bank and licensed family takaful operator under the Islamic Financial Services Act 2013 (“IFSA 2013”);
  3. a prescribed development financial institution under the Development Financial Institutions Act 2002;
  4. an approved non-bank issuer of designated payment instruments under the FSA 2013;
  5. an approved non-bank issuer of designated Islamic payment instruments under the IFSA 2013; and
  6. a licensed money-changing operator and/or a licensed remittance service provider under the Money Services Business Act 2011.
  7. The Policy Document sets out the minimum requirements and standards that financial institutions, as listed above, must observe in the implementation of e-KYC for the identification and verification of individuals and seeks to promote the safe and secure application of e-KYC technology in the financial sector by clarifying desirable outcomes in the use of e-KYC and sets out best practices, as well as parameters to ensure security and integrity of the on-boarding process for customers.

BNM has also issued an FAQ dated 30 June 2020 that is intended to provide clarification to financial institutions in relation to the Policy Document.