Three major banks made a significant development in a recent proof-of-concept examination.
OCBC Bank, HSBC and Mitsubishi UFJ Financial Group (MUFG), together with Singapore's Infocomm Media Development Authority (IMDA), has become the first consortium in Southeast Asia to successfully complete a proof-of-concept for a Know Your Customer (KYC) blockchain.
The prototype’s performance was tested between February and May 2017 for its functionality, scalability and security. It remained stable even with a high volume of information flow, was resistant to tampering by third parties and maintained confidentiality by permitting access to the ledger’s information only with legitimate authentication.
Commercial Use Soon
This development raises the possibility of using blockchain technology to make one of the most complex and highly-regulated of financial processes more efficient and secured, thereby combating anti-money laundering (AML) and the financing of terrorism (CFT), the parties said in a media release.
The existing KYC process consists of submitting a set of identification documents each time an individual or corporate customer starts a new relationship with a bank. New relationships include opening an account, applying for a credit facility or buying an insurance policy.
Bottom Line Benefits
If adopted, the Know Your Customer (KYC) blockchain can improve the experience of on-boarding customers and reduce inefficiencies and costs associated with KYC and compliance.
«Our pioneering efforts have resulted in a KYC process that will not only enhance customer convenience, but will improve the industry’s operating efficiencies while reducing financial fraud and crime,» said Pranav Seth, head of E-Business, Business Transformation and Fintech and Innovation Group, OCBC Bank.
