KYC, Client Onboarding: Leveraging Blockchain Technology

Abstract

Know-your-customer (KYC) and on-boarding processes pose numerous problems; both to banks and their corporate customers. The regulators for financial institutions, on the other hand, require that these processes meet ongoing compliance requirements. Presently, each institution maintains their own copy of customer data and performs verification via centralized data providers. This process is time-consuming, complex, costly, prone to duplication and redundancy; the result is delays in on-boarding a new client. Consequently, the experience can be a make or break for the ongoing relationship the customer has with the organisation. Key variables like client loyalty, experience, referrals, and profitability depends on the company’s customer on-boarding process. On-boarding done the wrong way will drive clients away. In this paper, I’ll explore some of the financial institutions using block-chain technologies to enhance the client on-boarding experience. For instance, 10 of R3’s consortium member banks developed a proof-of-concept for a KYC registry that intended to allow the management of both individuals and entities identities by the identity owners.