loKYC & AML and their role in InsCoin
KYC or ‘Know Your Customer’ is a Customer Identification Process, and it is an SOP based process in various entities especially directly involving Finance to find out the background, income resources and financial assets of the clients. Normally it is the requirement of the Central Bank of the country for the Banks to run KYC process before account opening.
Similarly, AML or ‘Anti-Money Laundering’ is a term used by financial and legal industries to describe the legal control that involves financial/economic organization and other delimited entities to avoid, perceive and report money laundering activates. In other words, the Entities are required to be thoughtful so that only the money earned through legal means may circulate in the economy.
KYC & AML are related to each other because if any financial institution does not follow the KYC procedure properly or does not keep an eye on suspicious transactions, then the money laundering will become easy in the financial sectors.
It can be concluded that the above processes have been devised to detect the black money and people behind them. But unfortunately our conventional system has almost failed in identifying this, and Billions of Dollars which come into the economy through illegal resources remain un-detected.
BlockChain atmosphere can turn out to be the replacement of the existing system and has taken the customer verification to the next level. Because all the transactions will be processed through a single decentralized network and all the transactions are arbitrarily reviewed by millions of nodes, therefore, inserting the black money into the network will become a very difficult and risky task.
InsCoin, as the first Insurance Platform on BlockChain Network operating through its own tokens, has initially conducted strict ‘Know Your Customer’ processes even before the ICO and sale of tokens so that only the fair people join the platform and get insured. What if this platform is adopted by all the industries for insurance purposes and therefore fraudulent activities will become rare, almost zero.
How KYC on InsCoin is different from conventional KYC. Well Conventionally the KYC & Customer data becomes part of the record and is not well integrated into the system to monitor each & every transaction. But with the crypto currency environment and the InsCoin Tokens, the customer data will affect every transaction as per their already provided & verified personal IDs, financial balances, Visa data, private address, service bills and many more information.
The funding raised and circulated in the white economy in the conventional system through the black resources could have been even used for terrorism funding. The example of InsCoin can be taken in such a way as if a salaried person of low scale approaches the company for a policy of very high premium which he may not afford then the payment of policy will be detected by the amazing BlockChain network and the transaction will be reported as suspicious. Similarly, insurance providers are also monitored by the BlockChain network and cannot avoid their circulated policies for claims.
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