Optimizing e-KYC Process Using Distributed Ledger Technology and Smart Contracts

Abstract

The current know-your-customer (KYC) process in banks needs the customer to go through the entire process of KYC in every bank. This process is redundant, time consuming and costly. To address this problem, we propose a an optimized solution for e-KYC process using distributed ledger technology and smart contracts, which aims at reducing the overall cost of KYC verification process in banks. With the help of the proposed smart contracts, the KYC verification needs to do once for a customer. The result of this KYC verification process is securely shared among other banks with the customer’s consent. It ensures that the relation between a customer and a bank is kept hidden from other banks. The proposed e-KYC solution offers efficiency, overall cost reduction and the improved trust with the increased transparency and throughput. The proposed solution is implemented on hyperledger fabric blockchain, and throughput and latency are analyzed to test its feasibility.