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Blockchain-based Decentralized KYC (Know-Your-Customer)

Authors:
Syed Azhar Hussain
Dr. Zeeshan-ul-hassan Usmani

Keywords: Blockchain trust management system self-soveregin identity; know your customer (KYC); customer privacy.

Abstract:
Know Your Customer (aka KYC) is the regulatory and compliance obligation for the conventional banking and financial system to capture customer information before onboarding and providing any financial services. In banks, KYC is embedded into the account opening forms, which mandate customers to provide accurate information and ideally update as soon as any change occurs in the KYC data. Similarly, other financial institutions such as stocks, Mutual Funds, Insurance companies, etc. also require KYC information from prospective customers. Primarily KYC helps financial institutions to prevent identity thefts, money laundering, terrorist financing, and profiling and eliminating the runaway creditors. Conventional banking and financial institutions spend a substantial part of customer acquisition costs of operating residents and isolated KYC databases and try to keep them updated and accurate. The overall cost of managing the silo KYC per customer increases because of a lack of transparencies, poor control, mistrust, and data duplication. Blockchain technology offers a solution to establish trust and transparency and provide a secure and publicly verifiable KYC. This paper presents a unique trust management platform based on self-sovereign and decentralizes Know-Your-Customer (DKYC) model to enhance customer privacy through consent-based access, featuring regulator governance and helping banks to use trusted and accurate customer data while reducing the customer acquisition costs.

Pages: 67 to 71

Copyright: Copyright (c) IARIA, 2019

Publication date: November 24, 2019

Published in: conference

ISSN: 2163-9027

ISBN: 978-1-61208-753-5

Location: Valencia, Spain

Dates: from November 24, 2019 to November 28, 2019