The Securities and Exchange Commission of Pakistan (SECP) has introduced IBAN-based digital verification to streamline customer onboarding, allowing investors to access financial services without unnecessary documentation or repeated verification. This initiative is part of the SECP's efforts to promote digital transformation in the financial sector.
Amendments to AML/CFT/CPF Regulations
To facilitate this change, the SECP amended the Anti-money Laundering, Combating the Financing of Terrorism and Countering Proliferation Financing (AML/CFT/CPF) Regulations, 2020. The amendments permit regulated entities—including securities brokers, futures brokers, insurers, takaful operators, non-bank finance companies (NBFCs), and modarabas—to verify customers using their International Bank Account Number (IBAN) details to complete Know Your Customer (KYC) requirements.
Digital Verification as an Alternative
The updated framework recognizes digital verification methods as an alternative to traditional processes, enabling quicker access to regulated financial services while maintaining regulatory safeguards. To strengthen investor protection and minimize the risk of unauthorized financial activity, all future transactions will be restricted to verified bank accounts held in the customer's own name, ensuring greater transparency and traceability.
Biometric Verification and NADRA Integration
In line with initiatives of the National Database and Registration Authority (NADRA), the amended regulations also introduce advanced biometric verification options, including facial recognition. Under the revised framework, customer accounts linked with NADRA-blocked Computerized National Identity Cards (CNICs) will be subject to immediate blocking.
