As Malaysia gears up for an e-commerce economy, fintechs are urging government regulators and financial institutions to set forth eKYC guidelines and standards. Most Malaysian banks are still focused on the Internet of Things (IoT), Artificial Intelligence (AI) and blockchain technology, but not fully appreciating the importance of eKYC for their broader financial services.
On its part, the Malaysian government has taken solid steps toward transforming Malaysian citizens into e-commerce consumers. One of which is the release of RM750 million used in setting-up e-wallet accounts with an initial credit of RM50 each, which 15 million Malaysian can claim as their own via a mobile application. That being the case, fintechs anticipate that more banking institutions will apply for licenses; making it imperative for government regulators to formulate eKYC guidelines in governing a larger financial services sector.
What is eKYC?
Electronic Know Your Customer or eKYC is the digital aspect of the Know-Your-Customer (KYC) process linked with the implementation of laws like the international Anti-Money Laundering Act (AMLA) and the Electronic IDentification Authentication and Trust Services (eIDAS) of the European Union. The process involves a series of identity verification checks that must be implemented before an entity enters into financial transactions with a client or consumer, to confirm and ensure a customer’s/client’s legal personification.
Since Malaysians are expected to become increasingly digital in carrying out and completing personal financial transactions, the use of eKYC technologies is seen as a more affordable and less time-consuming approach to ID verifications.
Studies have already revealed that onboarding customers by way of eKYC presents potential cost reductions by as much as 90%, when compared to the conventional KYC method. The more important revelation is that eKYC will also enable as many as 1.7 billion people belonging to Malaysia’s unbanked population.
The Global iGaming Industry as One of the Early Adopters of eKYC
In providing support for proposals to legalize online gambling in Malaysia, this article highlights the fact that several members of the global igaming industry are among the early adopters of eKYC technologies, as a post-pandemic reaction.
Allow us to cite Playtech as an example, which provides its products and technologies to numerous online gambling operators in Europe, the North Americas and Asia. In April 2020, Playtech entered into a partnership with Jumio, a company dedicated to providing technology solutions for streamlining ID and document verification processes.
Today, online gambling operators partnering with Playtech enjoy the advantages of using Jumio’s eKYC technologies in onboarding new customers. That way, it takes little time and effort to verify the ID documents and biometrics of a registering customer, which is a good start for building a strong customer relationship. In Malaysia, one of Playtech’s Asia-facing online casino is 918kiss, which has already gained popularity as one of the most trusted online gambling sites in Southeast Asia.