Asean banks complete trial of KYC blockchain

Asean banks complete trial of KYC blockchain

OCBC Bank, HSBC and Mitsubishi UFJ Financial Group (MUFG), together with Singapore's Infocomm Media Development Authority (IMDA), have completed a proof-of-concept for a Know Your Customer (KYC) blockchain.

Adopting a utility approach, the KYC blockchain was used to collect, validate, secure and share customer information on a permissioned ledger, eliminating the need for multiple form-filling by customers at different banks and eradicating inconsistencies in data gathering. The three banks on the platform were also able to store secured digital records of the validation process, thereby streamlining auditing and regulatory reporting.

The prototype’s performance was tested between February and May 2017 for its functionality, scalability and security.

Pranav Seth, head of e-business at OCBC Bank says the platform remained stable even with a high volume of information flow and maintained confidentiality by permitting access to the ledger’s information only with legitimate authentication.

“This partnership fans the spirit of cooperation among competitors as well as regulatory and government bodies, and we hope this will help foster and inspire more of such collaborative innovation initiatives," he says. "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.”

Comments: (1)

A Finextra member
A Finextra member 04 October, 2017, 02:05Be the first to give this comment the thumbs up 0 likes

There is already a number of KYC Utilities in the market by major players, most of them focussing on entity information. They are secure, managed by the end user (often the entity) and a log is kept of any access and changes to records. Sound familiar? 

The issue I see with the current players and the  emerging utility blockchains, is there will always be fragmentation. No one company or group will have all the information, which means you'll need to subscribe to all the available Utilities and even then, the data won't be centralised. 

Is an 'Open KYC Utility' model feasible?

Maybe not. The current players have fought hard and spent time and money to get their market share. Giving up some of this might not possible. 

At the moment, I don't see the KYC issue as a technology problem, I see it as a commercial problem. But I do see the things heading in a better direction than in the past. 

Happy to chat about this if you want to connect with me