In the future, blockchain based KYC- Know your Customer utilities will save cost to any industry that relies on identity verification. As blockchain allows banks and other financial organizations rely on a more organized unified model who can handle data securely.
Let’s take a closer look at the benefits of using the Blockchain Technology
for KYC Verification,
1. Distributed client data collection
A KYC utility model is based on blockchain technology, which enables the financial and banking sectors to set the process of identification verification. With the introduction of blockchain solution to handle the KYC process, data will be available on a decentralized network. Which help third parties directly assessment the data after permission has been given. From the blockchain development services company
, The blockchain based KYC system offer better data security by ensuring that the data access is only made after the confirmation from the relevant authority. This will overall eliminate the chance of unauthorized access and subsequently give individuals greater control over their submitted data.
2. Automation in policies and operations
A data collection of clients and users occurs on the daily basis in all type of organization, business and in any other institution. We all share our personal data everyday sometimes on bill payments, sometimes for booking tickets, and on other many things. Considering the recent progress achieved on KYC policy standardization and the increased huge amount of data, with the use of blockchain solutions; the smart contracts for the execution of control and operational processes is possible now. Blockchain workflow routing can be coded and this will increase the effectiveness of the blockchain based KYC system with the help of the blockchain development services company.
3. Organizing the risk and controls
The banks and the financial sectors can reduce risk by limiting the extent of human input and driving standardization within the industry. Compared to physical documents, a customer entered data direct feeds into the corporate profiles will be able to maintain and reduce mistake or fraud risk and the scope for human errors. Blockchain enables key regulatory concerns, it enables the constant auto-capture of client data and the AML risk rating process conducted by the bank which also limits banks’ risk exposure. Overall the key regulatory concerns help banks’ to bring about a big change in the allocation of anti-money laundering risk rating, could be automated through more objective criteria.
Also published on Medium.