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Go Smarter: Revolutionizing E-KYC in Sharia FinTech through Cutting-edge RegTech Technology!

Ekonomi Syariah | Thursday, 16 Nov 2023, 23:37 WIB

In Indonesia, we know that one of the economic sectors that has an important role in driving the country's financial wheels is banks. This is supported by the main actors in bank operations themselves, namely the people who register themselves as bank users. One of the registration requirements is the submission of personal data to the bank which is included in the KYC stage.

KYC (Know Your Customer) is the process of collecting identification information from customers directly to verify their identity and understand their profile. The KYC process has been explained in Law Number 8 of 2010 concerning Prevention and Eradication of the Crime of Money Laundering. Article 18 Paragraph 5 states that the principle of getting to know service users must include identification of service users, verification of service users, and monitoring of service users.

E-KYC (Electronic Know Your Customer) is a technology-based customer acquisition process. The e-KYC system in the sharia FinTech industry is usually regulated to ensure that e-KYC practices comply with sharia principles. Some overview of the e-KYC system and its regulations in the sharia FinTech industry, such as: customer identity verification, data security, reporting obligations and sharia compliance. This E-KYC model helps in various sectors such as: telecommunications, capital markets, insurance, real estate, electronic commerce, government and others.

Regulatory Technology (RegTech) is technology that helps banks or fintechs to fulfill regulatory obligations by provides anti-money laundering, customer identification, transaction, screening and risk data processing monitoring.Factors that influence RegTech, namely: fintech company size, regulatory environment, infrastructure, technological advances, customer expectations, data security, culture and mindset.

The integration of RegTech in the Islamic FinTech sector has significantly increased the efficiency of the E-KYC process. The positive impact of RegTech, namely: automation of manual tasks, data analysis, efficient reporting, real-time monitoring and alerts, as well as automatic sharia compliance checks.

This article invites us to be smart, by knowing the revolution between E-KYC and RegTech in the FinTech industry which is pushing the industry into a new era of technological sophistication and also strengthening commitment to Islamic principles. RegTech will always improve its quality regarding security, efficiency and compliance in the FinTech landscape in accordance with sharia principles. So that financial transactions in Sharia FinTech can be carried out smartly, safely and in accordance with regulatory standards.