Banking on Blockchain for Better KYC
The Know Your Customer (KYC) component of anti-money-laundering regulations does not stop at identity verification during the onboarding process — KYC also requires banks to remain vigilant while monitoring their clients’ financial activities. It is one of the most resource- and cost-intensive requirements that banks must comply with.
These requirements necessitate the collection of huge swathes of data from every client, including operational, legal and financial information, all of which needs to be validated, alongside the performance of standard background, tax and credit checks. Due to the severity of the issue, however, this process does not end at the point of onboarding — and the continuous surveillance of clients in order to remain vigilant of irregularities also takes up a lot of time.
Blockchain has the potential to make KYC compliance faster, simpler, and more economical. This rapidly evolving technology enables participants in a network to share one distributed ledger that collectively records transactions. These network participants can exchange anything of value privately, and without the involvement of any third-party intermediaries.
According to Dennis Martens of business consulting and technology services firm Synechron, “Blockchain can address some of the most prominent problems associated with current procedures, and in turn revolutionize how banks and financial institutions will address KYC regulations and remain compliant while cutting costs and increasing efficiencies from the bank perspective, and ensuring an enhanced customer experience.
Martens continued, “A ballpark estimate of the potential costs savings that result from implementing a blockchain KYC utility solution would include a reduction of approximately 55% in operations labour hours, and a reduction of at least 30% in compliance costs associated with KYC. A large bank with 100,000+ clients spends up to $100 million yearly on KYC and client onboarding. Therefore, savings from blockchain implementation could exceed $50 million.”
Peer Mountain’s patent-pending PeerchainTM technology ensures efficient, cost-effective KYC compliance for financial institutions. In addition to providing an easy onboarding experience for individual and corporate customers, Peer Mountain’s blockchain-based identity protection, trust, and compliance platform encrypts sensitive personal and corporate information for complete cyberprotection and privacy. Learn more about Peer Mountain.
Join us in Telegram to hear all the news first: https://t.me/peermountain
