SECP IBAN Verification Introduced for Faster Digital Customer Onboarding

SECP IBAN Verification Introduced for Faster Digital Customer Onboarding

The SECP IBAN Verification system has been introduced to simplify customer onboarding across Pakistan’s regulated financial sector. The Securities and Exchange Commission of Pakistan (SECP) announced that financial institutions can now use customers’ International Bank Account Numbers (IBANs) as part of the Know Your Customer (KYC) verification process, reducing paperwork while strengthening digital identity verification.

According to an official SECP statement, the initiative is aimed at modernizing Pakistan’s financial ecosystem by expanding digital access, improving the ease of doing business, and maintaining strong safeguards against financial crime. The changes also introduce new biometric verification options and tighter controls designed to enhance investor protection.

SECP Introduces IBAN-Based Customer Verification

The Securities and Exchange Commission of Pakistan announced the new framework on Saturday as part of amendments to the Anti-Money Laundering, Counter Financing of Terrorism and Countering Proliferation Financing (AML/CFT/CPF) Regulations, 2020.

Under the revised rules, regulated financial institutions can verify customers through their IBAN details when completing mandatory KYC requirements.

Previously, customer onboarding often involved repeated document submissions and manual verification processes. The updated regulations recognize IBAN-based digital verification as an alternative method, allowing institutions to complete onboarding more efficiently while remaining compliant with regulatory standards.

According to the official statement, the change is intended to improve customer experience without weakening regulatory oversight.

Which Financial Institutions Will Use the New System?

The updated regulations apply to a wide range of financial service providers regulated by the SECP.

These include:

• Securities brokers
• Futures brokers
• Insurance companies
• Takaful operators
• Non-Banking Finance Companies (NBFCs)
• Modarabas

These organizations can now use the new verification process when opening customer accounts or providing regulated financial services.

The move is expected to make digital onboarding faster while reducing the administrative burden on both institutions and customers.

Why SECP Introduced IBAN Verification

According to the SECP, the new framework forms part of its broader effort to modernize Pakistan’s financial services sector through technology.

The regulator said the initiative supports:

• Faster digital onboarding
• Reduced documentation requirements
• Improved customer convenience
• Greater financial inclusion
• Better regulatory compliance
• Secure digital verification

The commission believes digital verification can help streamline access to regulated financial products while preserving robust safeguards against fraud and financial crime.

Stronger Investor Protection Measures

Alongside easier onboarding, the amended regulations introduce additional safeguards aimed at protecting investors and improving transparency within Pakistan’s financial system.

According to the SECP, future financial transactions under the revised framework will only be permitted through verified bank accounts registered in the customer’s own name.

The regulator says this measure is designed to reduce unauthorized financial activity while improving the traceability of transactions across regulated markets.

By ensuring that customer accounts are linked to verified banking information, authorities expect stronger accountability throughout the financial sector.

New Biometric Verification Options Added

The updated regulations also incorporate advanced biometric verification methods in line with initiatives introduced by the National Database and Registration Authority (NADRA).

Among the newly recognized verification options is facial recognition technology, which can be used as part of customer identity verification.

These digital tools are expected to support more secure remote onboarding while reducing reliance on physical documentation and in-person verification procedures.

The SECP said the amendments are intended to strengthen identity verification without compromising regulatory requirements.

Accounts Linked to Blocked CNICs Will Be Restricted

Another significant feature of the revised framework concerns customers whose Computerized National Identity Cards (CNICs) have been blocked or impounded by NADRA.

According to the amended regulations, customer accounts associated with blocked or impounded CNICs will be immediately restricted under the updated compliance framework.

This measure is intended to strengthen regulatory controls and reduce the misuse of financial services by ensuring identity information remains valid throughout the customer relationship.

Digital Records Recognized for Compliance

The amendments also modernize recordkeeping requirements for regulated institutions.

The SECP has formally recognized digital logs as acceptable records for Anti-Money Laundering and Counter Financing of Terrorism compliance, as well as data retention purposes.

In addition, prescribed regulatory forms have been updated to align with the Companies Regulations, 2024.

The regulator says these changes support digital transformation while maintaining compliance with Pakistan’s financial laws.

Why the New Framework Matters

The latest reforms represent another step toward expanding digital financial services in Pakistan.

By allowing IBAN-based customer verification, regulated institutions may be able to onboard customers more quickly while reducing paperwork and repetitive verification procedures.

At the same time, the inclusion of biometric verification, verified bank account requirements and stricter identity controls aims to maintain security and strengthen investor confidence.

The revised framework also reflects the growing use of digital technologies in financial regulation, balancing convenience with compliance under Pakistan’s existing AML and KYC requirements.

As financial institutions begin implementing the updated rules, customers may experience a more streamlined onboarding process while continuing to meet regulatory verification standards.