Storing and Verifying Enterprise KYC/Government IDs on the RecordsKeeper blockchain
KYC procedures and compliance have become increasingly important in the banking industry as regulators are keeping track of banks by noting down with whom they are doing business. This is done to prevent potential money laundering or terrorist financing. Currently, institutions offering financial or professional services are obliged to follow time-consuming and expensive practices for each new customer. These KYC processes can delay business as it can take between 30 to 50 days to complete satisfactorily. Some estimates show that global spending on AML compliance alone is close to $10 billion. Banks are also coming under pressure from various investors and analysts to reduce costs, but many expect the compliance budgets to increase in the coming years rather than decrease.
The adoption of blockchain technology could lead to the reduction of AML and KYC costs, thanks to its cross-institution client verification capability, as well as its effectiveness in monitoring and analyzing data required for AML and KYC checks. RecordsKeeper performs this use case flawlessly, without the need to maintain physical documents. The authenticity of these documents can be easily verified because of the nature of the blockchain. RecordsKeeper streams can maintain records of various identification cards, which can be shared and verified when required by any enterprise unit or government agency.
On the RecordsKeeper blockchain, the verification of a client or the legality of a transaction can be determined just once, with the final result cryptographically stored on the RecordsKeeper blockchain. Organizations such as banks or administration services providers would be able to get rid of the multistep AML and KYC processes. More specifically, all of the information related to a client would become available to organizations with the appropriate permissions via a distributed database that would be considered a single source of “truth.” So, when a bank has verified a new client, they can then put the client’s data on the RecordsKeeper blockchain which can then also be accessed by other banks and accredited organizations, such as loan providers and insurance companies, without the need for the KYC process to be repeated by another party. These parties would know that the client’s information has been independently audited and verified by various independent miners so that no more KYC checks would be necessary.