The SECP IBAN-Based Digital Verification system has been introduced to make customer onboarding faster, easier, and more secure across Pakistan’s regulated financial sector. The Securities and Exchange Commission of Pakistan (SECP) announced on Saturday that it has amended its Anti-Money Laundering, Counter Financing of Terrorism, and Countering Proliferation Financing (AML/CFT/CPF) Regulations, 2020, allowing financial institutions to verify customers through their International Bank Account Number (IBAN).
The new initiative is aimed at reducing paperwork, eliminating repetitive verification procedures, and improving access to financial services while maintaining strict regulatory standards. The move forms part of SECP’s broader strategy to accelerate digital transformation in Pakistan’s financial ecosystem and promote greater efficiency for both investors and regulated entities.
IBAN Verification to Simplify KYC Process
Under the revised regulatory framework, customers will be able to complete Know Your Customer (KYC) requirements using their verified IBAN details instead of relying solely on traditional documentation.
According to the SECP, this digital verification process will significantly simplify customer onboarding by reducing unnecessary documentation and shortening the time required to open accounts or access regulated financial services.
The regulator said the initiative reflects its commitment to adopting technology-driven solutions that improve customer experience while preserving the integrity of Pakistan’s financial system.
The use of IBAN-based verification is expected to make financial services more accessible, especially for customers seeking quicker account opening and investment opportunities.
Wide Range of Financial Institutions Covered
The amended regulations apply to a broad range of institutions regulated by the SECP.
These include securities brokers, futures brokers, insurance companies, takaful operators, non-banking finance companies (NBFCs), and modarabas. All of these regulated persons can now use customers’ IBAN information as an approved method for fulfilling KYC requirements.
By enabling a standardized digital verification process, the SECP aims to create a more efficient and consistent onboarding framework across Pakistan’s financial sector.
The regulator believes the change will improve operational efficiency while reducing compliance costs for regulated entities.
Digital Transformation of Pakistan’s Financial Sector
The SECP IBAN-Based Digital Verification initiative is part of the regulator’s broader efforts to modernize Pakistan’s financial markets through technology.
According to the commission, the updated framework supports digital access to financial services, improves the ease of doing business, and strengthens secure customer verification mechanisms.
The revised regulations formally recognize digital verification methods as an alternative to conventional paper-based procedures.
This shift is expected to encourage greater adoption of digital financial services while ensuring that institutions continue to comply with anti-money laundering and counter-terrorism financing requirements.
The SECP emphasized that technological innovation remains a key priority in improving regulatory efficiency and expanding access to financial products.
Stronger Investor Protection Measures
Alongside simplifying customer onboarding, the new framework introduces additional safeguards to strengthen investor protection and reduce the risk of unauthorized financial transactions.
Under the amended regulations, future financial transactions will only be permitted through verified bank accounts registered in the customer’s own name.
This requirement is designed to improve transparency, increase traceability, and reduce the possibility of fraudulent or unauthorized transfers within Pakistan’s financial markets.
The SECP believes that linking financial transactions to verified personal bank accounts will strengthen market integrity while enhancing confidence among investors and financial institutions.
Advanced Biometric Verification Introduced
The revised regulations also align with the digital initiatives introduced by the National Database and Registration Authority (NADRA).
As part of the amendments, advanced biometric verification methods, including facial recognition technology, have been incorporated into the customer verification framework.
These biometric tools will provide regulated entities with additional options to verify customer identities digitally while maintaining high security standards.
The inclusion of facial recognition is expected to further streamline remote onboarding processes and reduce reliance on physical document verification.
The regulator said these measures support Pakistan’s ongoing transition toward a digitally enabled financial environment.
Immediate Action on Blocked CNICs
Another important feature of the amended framework is the treatment of customer accounts associated with blocked or impounded Computerized National Identity Cards (CNICs).
According to the SECP, customer accounts linked to CNICs that have been blocked or impounded by NADRA will be immediately blocked under the revised regulations.
This measure is intended to prevent unauthorized financial activities and strengthen compliance with national identity verification standards.
The integration between financial institutions and NADRA’s verification systems is expected to enhance the overall security of Pakistan’s financial infrastructure.
Digital Records Recognized for Compliance
The amendments also modernize record-keeping requirements by recognizing digital logs as valid records for AML/CFT compliance and data retention purposes.
This change allows regulated entities to maintain electronic records that satisfy regulatory obligations, reducing reliance on physical documentation while supporting digital business operations.
In addition, the prescribed regulatory forms have been updated to align with the Companies Regulations, 2024, ensuring consistency across Pakistan’s evolving corporate and financial regulatory framework.
A Step Toward a Digital Financial Ecosystem
The launch of SECP IBAN-Based Digital Verification represents another milestone in Pakistan’s digital financial transformation. By enabling IBAN-based KYC verification, introducing biometric authentication, strengthening investor protection measures, and recognizing digital compliance records, the SECP aims to build a more efficient, secure, and technology-driven financial system.
The regulator expects these reforms to improve customer experience, reduce onboarding delays, enhance regulatory compliance, and encourage greater participation in Pakistan’s financial markets. As digital financial services continue to expand, the updated framework is expected to play a key role in supporting innovation while maintaining strong safeguards against financial crime.