Digital customer verification now compulsory for insurance, brokers, and fund managers
According to the circular, all insurance companies, stock dealers and brokers, portfolio managers and merchant bankers, securities custodians, and asset management firms operating in Bangladesh must follow this directive.
The Bangladesh Financial Intelligence Unit (BFIU) has made it mandatory for all insurance companies and capital market intermediaries operating in Bangladesh to comply with the electronic Know Your Customer (e-KYC) or digital customer identification verification process.
According to the circular, all insurance companies, stock dealers and brokers, portfolio managers and merchant bankers, securities custodians, and asset management firms operating in Bangladesh must follow this directive.
BFIU recently issued a comprehensive guideline on the matter, which the relevant institutions must fully implement by 31 December 2026. The initiative aims to strengthen financial inclusion, simplify and speed up customer onboarding, and enhance capabilities to prevent money laundering and terrorist financing (AML/CFT).
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Under the e-KYC guidelines, institutions must primarily collect and verify customer information digitally. This involves using the National ID (NID) database to authenticate identity instantly through fingerprint or facial recognition (face-matching).
Customers can complete this process themselves via smartphone (self-check-in) or with the direct assistance of a company representative (assisted). For data capture from the NID, the use of Optical Character Recognition (OCR) technology has been instructed.
The guideline divides e-KYC into two categories: 'Simplified' and 'Regular'. Simplified e-KYC applies to low-risk insurance products and BO accounts.
According to BFIU's limits, the simplified e-KYC method can be used for initial BO account deposits up to Tk15 lakh, life insurance coverage up to Tk20 lakh (annual premiums under Tk2.5 lakh), and general insurance premiums up to Tk2.5 lakh. Transactions above these amounts or involving high-risk customers require "Regular e-KYC", including detailed data collection and digital risk grading.
Institutions may take technical assistance from third parties for implementing e-KYC, but the final responsibility for the accuracy and security of customer data remains with the institution itself. The implementation of this modern system is expected to simplify customer service and significantly reduce operational costs and processing time for institutions.
