Japan’s top banking trio will verify customer identity with financial technology currently used for digital currencies.
Three major Japanese banking groups launched a test to share customer identification (ID) information utilizing blockchain technology, used for digital currencies such as bitcoin, in a bid to make it easier for customers to open bank accounts. In the trial, the three groups jointly set up a management body for blockchain.
The three parties, including Mitsubishi UFJ Financial Group Japan's largest financial group, aim to sort out issues by next spring that need to be addressed to put the data-sharing into practical use. The Financial Services Agency (FSA) plans to support the effort by setting up a special team to give advice on legal interpretations and other issues.
Money Laundering Checks
The banking groups judged blockchain to be suitable for managing customer ID information. It is considered difficult to manipulate data managed with the technology, which stores data in a distributed network of multiple computers that monitor each other.
When a bank account is opened, the customer’s ID information will be registered in the blockchain system. When the customer opens an account at a different bank, the registered ID information will be utilized.
Currently, banks need to confirm the IDs of customers every time they open an account, including as part of measures against money-laundering. It takes about a week to complete the procedure even with online applications, including for ID confirmation procedures by mail.
