The Central Bank of the Republic of Azerbaijan launches Digital Identification System in cooperation with IBM

The Central Bank of Azerbaijan has launched a Digital Identification System (DIS), called BankID which allows citizens, as well as legal entities of Azerbaijan to securely use online services provided by the banks. The DIS is an initiative by the Central Bank conducted within the “State Program on expansion of digital payments in the Republic of Azerbaijan in 2018-2020”. The blockchain technology-based system was built by IBM using open source Hyperledger Fabric, a Linux Foundation framework. The use of such technology allows to bring trust, simplicity and enhanced customer experience to financial services.

The system, running on software defined and virtualized infrastructure uses the “Know Your Customer” approach, which ensures that the banks’ clients’ are actually who they claim to be and are compliant with the respective laws. It allows the citizens of Azerbaijan to manage their digital credentials online, ensuring accuracy of data, and minimizing the potential for fraud.

As a result, individuals, independent entrepreneurs and legal entities in Azerbaijan now will be able to remotely open bank accounts and request payment cards, and in the near future, obtain loans, credit cards and access other financial services.

“The Digital Identification System, developed together with IBM, will help commercial banks in Azerbaijan to accelerate their digital transformation and provide better and faster services to their clients. Citizens and legal entities can select and compare banking services and products on the marketplace (https://bankmarket.az), as well as instantly request and obtain them via the BankID system (https://bankid.az). The system is available for clients on Apple and Google Play Store. This system is the fundamental platform, which will be a cornerstone for our Open Banking initiative we will implement with IBM,” said Farid Osmanov, Executive Director at the Central Bank of Azerbaijan.

Within the long and productive cooperation with the Central Bank of Azerbaijan, IBM is providing a full range of services for the development, implementation, modernization and maintenance of the DIS. Blockchain was chosen for the system because it ensures immutability and reliability of the credentials.

“Blockchain is an enabler of ecosystems that are built on trust and transparency. We were happy to help build a secure and robust system for the Central Bank of Azerbaijan, based on our best international expertise and experience,” said Victor Choumakov, Associate Partner, RCIS Application Innovation & Blockchain Leader.

It is expected that the Central Bank’s Digital Identification System will be scaled to embrace not only the banking but other economy sectors as well by expanding the participants’ list to include other government agencies and authorized service providers.