The document discusses how blockchain technology can transform KYC (Know Your Customer) processes in banking and finance by enhancing efficiency, reducing costs, and increasing data security. It highlights the limitations of traditional KYC systems and emphasizes the benefits of a decentralized, transparent, and immutable blockchain-based approach. Additionally, it showcases examples of how companies like IBM are implementing blockchain solutions for KYC verification.

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What Is The Blockchain KYC Solutions?
Banking and financial systems are an important pillar in a nation's economy. Their
functioning needs to be seamless and transparent. However, the current banking
system lacks this factor. Though there is a wave of change that is impacting this
sector, we still have to buckle up to face the challenges of the future.
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Has it ever bothered you, what if the personal information and bank details get
leaked, why it takes so much time for verification and validation? Well, these are
some common hindrances in the way of an effective banking system. Besides,
banks also face a lot of hassles while completing the KYC.
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Whooping Number
As per the reports of Thomson Reuters, some of the major banking and financial
institutions are spending around $500 million for KYC. The average spending on
KYC by some of the major financial institutions is $48 million.
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When we talk about KYC, then it's important to mention that KYC is a prolonged
procedure. This consumes not only time but also a lot of money. Moreover, there
is no guarantee of the authenticity of the information, but with the help of
Blockchain technology, we can easily overcome all these problems. Blockchain
offers features like data security, provenance, authenticity and transparency. All
these factors make Blockchain overcome the problem in the conventional banking
and financial system.
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How Will Blockchain Help?
With the help of a decentralized system like Blockchain, you can easily
accumulate data from different authoritative service providers into a single
immutable and cryptographically secured database. With the help of Blockchain,
we can have a DLT that is shared to all the users on the network. With
decentralization, there is no single ruling authority, thus making the system less
vulnerable. All these features make Blockchain a trustworthy platform to store ID
details.
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This feature of Blockchain technology can become useful for the financial service
sector. One of the uses of Blockchain for the financial sector is in KYC verification.
It will aid faster and easier KYC verification. Since Blockchain offers reliability,
financial institutions can Due to the reliability of Blockchain databases,
government institutions and companies can use this technology for KYC
verification.
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Use Of Blockchain For KYC
Companies like IBM are using Blockchain-based KYC platform. The basic
architecture of this platform is where a bank sends a request to the Blockchain
platform to access your identity information. The user has to log in the platform via
OTP and allocates a private key to the bank. Though a third party can access the
data, the consent for the same is given by the user.
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1. Distributed user data collection- Unlike the conventional system, the new
Blockchain-based platform will allow the third parties to access the information
easily, but only after the permission for the same is acquired.
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2. Transparency- Blockchain-based KYC platforms will help in monitoring every
information right from the opening of an account to everyday transactions. When
this is merged with smart contracts that have pre-programmed parameters to find
out faulty activity etc. This new platform will alert the banks and financial
institutions about the malicious activities. With the immutability feature, you are
assured of having a system where data is safe and cannot be altered.
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The future:
These were just one of the ways in which Blockchain can enhance the KYC
system and at the same time makes it trustworthy and free from hacking.
Moreover, there is a guarantee of the authenticity of the information. All this
happens with the successful implementation of Blockchain technology with the
current banking system. Here comes the role of Blockchain expert.
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At Blockchain Council, you will not only get information about Blockchain but also
about the implementation of this technology in different fields. With this
certification program which is specially designed for the financial system, you can
easily pick up how to use Blockchain technology for KYC and other aspects of
banking.
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Blockchain Council Certifications
You can check out our certifications, and kick start your career in the Blockchain
space today.
● Certified Blockchain Expert
● Certified Blockchain Developer
● Certified Smart Contract Developer
● Certified Solidity Developer
● Certified Ethereum Developer
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Any questions?
You can mail us at
hello@blockchain-council.org
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