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KYC Optimization Using Distributed Ledger Technology


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

Abstract

The know-your-customer (KYC) due diligenceprocess is outdated and generates costs of up to USD 500million per year per bank. The authors propose a newsystem, based on distributed ledger technology (DLT), thatreduces the costs of the core KYC verification process forfinancial institutions and improves the customer experi-ence. In the proposed system, the core KYC verificationprocess is only conducted once for each customer,regardless of the number of financial institutions withwhich that customer intends to work. Thanks to DLT, theresult of the core KYC verification can be securely sharedby customers with all the financial institutions that theyintend to work with. This system allows for efficiency gains, cost reduction, improved customer experience, and increased transparency throughout the process ofonboarding a customer.

Abstract

The know-your-customer (KYC) due diligenceprocess is outdated and generates costs of up to USD 500million per year per bank. The authors propose a newsystem, based on distributed ledger technology (DLT), thatreduces the costs of the core KYC verification process forfinancial institutions and improves the customer experi-ence. In the proposed system, the core KYC verificationprocess is only conducted once for each customer,regardless of the number of financial institutions withwhich that customer intends to work. Thanks to DLT, theresult of the core KYC verification can be securely sharedby customers with all the financial institutions that theyintend to work with. This system allows for efficiency gains, cost reduction, improved customer experience, and increased transparency throughout the process ofonboarding a customer.

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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:13 May 2020 21:58
Publisher:Springer
ISSN:1867-0202
OA Status:Green
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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