How blockchain can be used for KYC and AML compliance
Reported by Thomson Reuters, banks and financial institutions on average spend around $60 million annually on KYC and AML. The number goes even higher to $500 million for some major banks around the world. Organizations have to allocate substantial resources to conduct these processes. As these compliances become more critical, the time and money involved will continue to rise.
Blockchain for KYC and AML
Blockchain, being a secure and reliable technology can be used in the financial sector for varied purposes. It allows exchanging value on a secure and transparent manner. That said, blockchain can be effectively used as a secure and traceable register to store KYC and AML data. The data collected by banks and financial institutions could be stored and shared securely. Whenever a customer would reach the bank to avail a financial service, the representatives can use the KYC data stored on the blockchain to complete the process.
Another benefit is that when a customer is using services from various banks, those banks can easily conduct the KYC process without doing everything from scratch. This would eliminate the need for collecting data, again and again, each time the customer avails a service. This could significantly bring down the time duration and lower the cost involved.
There are a number of ways blockchain can revolutionize the KYC and AML compliance for banks. With the technology, banks can bring speed at work and enhance operational efficiencies the KYC/AML procedures. To learn more, read our detailed blog here.