International blockchain consortium R3, which develops financial and technological solutions based on its own Corda platform, announced that 39 companies have tested a Know Your Customer (KYC) application.
Why it is important
- The service demonstrates how banks can use blockchain-based solutions in order to fulfill the basic requirements of the KYC policy for new customers. At the same time, financial institutions can ensure transparency, security, and a high level of profitability.
- Testing involved major banks such as BNP Paribas, Deutsche Bank, ING, Raiffeisen Bank International, and Societe Generale, as well as the Federal Reserve of Boston, Colombia’s central bank, and a financial regulator from Peru.
R3 reported that its partners completed more than 300 transactions in the KYC application during a four-day joint study. Transactions were conducted in 19 countries in eight time zones.
- The new model replaces the traditional complex processes of KYC
- Development allows corporate customers to create and manage their own identifiers
- Banks can grant permission to several participants to access customer data
- Each institution will not need to individually verify and update KYC records
“KYC requirements present a significant challenge to financial institutions and the process is often slow and time-consuming. As our corporate membership continues to grow, there has been increasing demand for blockchain-based KYC solutions. Not only does this project demonstrate how blockchain can allow institutions to retain control of and manage their own identity, but it also validates the design choices we made in our approach to privacy on Corda,” David E. Rutter, CEO of R3, said.
Banks get the opportunity to instantly check the client by connecting to the general registry. The same procedure can take several days with existing technologies. The application allows you to use the traditional banking KYC procedure in combination with blockchain technologies. Such innovative fintech solutions contribute to better customer service.
By Ekaterina Ulyanova