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KYC Optimization Using Distributed Ledger Technology


Parra Moyano, José; Ross, Omri (2017). KYC Optimization Using Distributed Ledger Technology. Business & Information Systems Engineering, 59(6):411-423.

Abstract

The know-your-customer (KYC) due diligence process is outdated and generates costs of up to USD 500 million per year per bank. The authors propose a new system, based on distributed ledger technology (DLT), that reduces the costs of the core KYC verification process for financial institutions and improves the customer experience. In the proposed system, the core KYC verification process is only conducted once for each customer, regardless of the number of financial institutions with which that customer intends to work. Thanks to DLT, the result of the core KYC verification can be securely shared by customers with all the financial institutions that they intend to work with. This system allows for efficiency gains, cost reduction, improved customer experience, and increased transparency throughout the process of onboarding a customer.

Abstract

The know-your-customer (KYC) due diligence process is outdated and generates costs of up to USD 500 million per year per bank. The authors propose a new system, based on distributed ledger technology (DLT), that reduces the costs of the core KYC verification process for financial institutions and improves the customer experience. In the proposed system, the core KYC verification process is only conducted once for each customer, regardless of the number of financial institutions with which that customer intends to work. Thanks to DLT, the result of the core KYC verification can be securely shared by customers with all the financial institutions that they intend to work with. This system allows for efficiency gains, cost reduction, improved customer experience, and increased transparency throughout the process of onboarding a customer.

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62 citations in Scopus®
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Physical Sciences > Information Systems
Language:English
Date:15 November 2017
Deposited On:16 Nov 2017 13:23
Last Modified:26 Jan 2022 14:10
Publisher:Springer
ISSN:1867-0202
OA Status:Hybrid
Free access at:Official URL. An embargo period may apply.
Publisher DOI:https://doi.org/10.1007/s12599-017-0504-2
Official URL:https://link.springer.com/article/10.1007%2Fs12599-017-0504-2
Other Identification Number:merlin-id:15439

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