Firm engaged to support money transfer operators

The Asian Development Bank (ADB) has engaged California-based company Everest – that uses blockchain technology to beef up identity protocols and guard against money laundering – to install its platform in the Samoa Central Bank (CBS).

The contract with the regional development bank was signed on March 1 this year with work starting immediately to put in place the system, with Everest CEO and co-founder Bob Reid telling banking technology magazine FinTech Futures that they expect the installation to be completed by the third quarter of this year.

Mr. Reid said its platform will support identity, know your customer (KYC), anti-money laundering (AML), e-wallets and transactions for Samoa and ensure there is regulatory requirements compliance, to enable money transfer operators (MTO) from New Zealand, Australia and Samoa to enable and send cross-border payments.

"In Samoa, digital ID is one component of an e-gov or e-bank solution. For a government or bank to deliver services digitally, they need digital ID, e-wallet, transaction ledger, data exchange layer and e-money," he added.

According to Mr. Reid, Everest’s platform will standardise the KYC compliance so that every citizen in Samoa can have a e-wallet (EverWallet) by compiling information (EverID) through biometrics, scan official documentation and identity verification through third-party checks, which plug into the platform itself.

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The Regional Director of the ADB's Pacific Liaison and Coordination Office in Sydney, Emma Fan, told the Samoa Observer that the engagement of Everest was made to address the increasing difficulty facing MTOs in the Pacific island countries in maintaining bank accounts in the developed countries. 

Some of these difficulties were highlighted in workshops held in Sydney and Auckland in February last year, consequently she said the ADB in consultation with the CBS identified this as a primary area of assistance over 2018, as most remittances into the region are sent using the MTOs. 

"There is a need for an inexpensive and automated platform that can be used by even small MTOs to verify the identities of remittance senders and recipients, as well to cost-effectively perform regulatory reporting. It is worth noting that the vast majority of remittances in the Pacific are sent through MTOs.  

The Central Bank of Samoa and ADB agreed to implement a technology-based Know Your Customer (KYC) platform to improve AML/CFT compliance of the MTOs. Upon success in Samoa, the KYC platform can be implemented in other Pacific island countries," she added. 

Ms. Fan said the ADB-funded project will provide implementation support and training to the MTOs.

In terms of the benefits of the Everest platform to the CBS and the Samoan economy generally, she said overseas remittances are an important component of the local economy and the new platform will improve compliance, competitiveness, and efficiency of the MTOs.

"Most money transfers to Samoa are done by Samoan citizens living in Australia and New Zealand and individual transaction sizes are relatively small. Low-cost remittances will benefit both the senders and receivers of funds and encourage more remittances into the country. It is expected that the technology-enabled KYC platform will assist in low-cost remittances by improving compliance, competitiveness, and efficiency of the MTOs."

Samoa has in recent years been blacklisted for possessing a "weak anti-money laundering regime" with the European Union late last year putting the country in the category. When Ms. Fan was asked if the Everest KYC platform will enable Samoa to address some of those concerns, she said: "Strengthening KYC in financial transactions is a part of a country’s overall AML/CFT compliance and will make a positive contribution towards it."

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