Emirates Islamic (EI) will be the first Islamic bank in the UAE to adopt blockchain technology to stamp out cheque fraud.
Following Emirates NBD’s announcement in May revealing it is piloting a blockchain project to integrate the technology into cheques to strengthen their authenticity and minimize potential fraud, sister company EI this month confirmed that it is following suit in the Cheque Chain initiative.
The multi-phase project involves the printing of a unique QR (Quick Response) code on every leaf of newly issued chequebooks, along with a string of 20 random characters on the magnetic ink character recognition (MICR) band of the cheque leaf using non-MICR ink. EI will then register each QR code on its blockchain platform, enabling bank staff to validate the authenticity of each cheque once every cheque is received and cleared. EI will have access to its source at all times.
This development is in line with the government’s Dubai Blockchain Strategy and Dubai global Islamic economy ambitions. EI COO Suhail Tarraf confirmed that the Islamic bank is making deeper investments into digital technologies to enhance the banking experience.
“We anticipate that Cheque Chain will dramatically reduce cheque frauds in this market, helping us provide our customers greater peace of mind and security,” Suhail said, adding that blockchain has the potential to significantly increase the security and protection in banking transactions.
As a member of the Global Blockchain Council set up by the Dubai Future Foundation, the market can expect EI to apply blockchain technology across other areas of business and operations from customer-facing and government transactions to internal systems.
“We anticipate blockchain to be a potential game-changer in creating a secure, scalable, cost and time-efficient digital ecosystem for [the] government and businesses and as a bank that has pioneered digital innovation in banking and payments in the UAE, we are truly excited to take the lead in testing future applications of this exciting technology in the banking sector,” Emirates NBD Group Chairman Shaikh Ahmed Saeed Al Maktoum previously noted.