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:
- a licensed bank, investment bank and life insurer under the Financial Services Act 2013 (“FSA 2013”);
- a licensed Islamic bank and licensed family takaful operator under the Islamic Financial Services Act 2013 (“IFSA 2013”);
- a prescribed development financial institution under the Development Financial Institutions Act 2002;
- an approved non-bank issuer of designated payment instruments under the FSA 2013;
- an approved non-bank issuer of designated Islamic payment instruments under the IFSA 2013; and
- a licensed money-changing operator and/or a licensed remittance service provider under the Money Services Business Act 2011.
- 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.