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Optimized and dynamic KYC system based on blockchain technology


Parra Moyano, Jose; Ross, Omri; Thoroddsen, Tryggvi (2019). Optimized and dynamic KYC system based on blockchain technology. International Journal of Blockchains and Cryptocurrencies, 1(1):1.

Abstract

Systems to improve the Know Your Customer (KYC) process using blockchain technology have only been proposed at a conceptual level and they all share some attributes that make their adoption by financial institutions (FIs) very difficult. We propose and program a blockchain-based system that reduces and shares out, among the financial institutions that work with a customer, the costs of the KYC process, and also makes it possible for FIs to dynamically update the information related to the customers and for this information to be disseminated among participating FIs. Additionally, our system solves some of the attributes that hinder the adoption of previous solutions by FIs. The result is a programed, stand-alone solution that can be implemented by FIs to reduce the cost of the KYC process without requiring any central instance to store the customer’s data, and in which FIs share the initial costs of the KYC process, as well as the running costs of keeping the information about the customers up to date. Our system increases the level of security and regulatory compliance in the KYC process, and significantly reduces its costs for all parties involved.

Abstract

Systems to improve the Know Your Customer (KYC) process using blockchain technology have only been proposed at a conceptual level and they all share some attributes that make their adoption by financial institutions (FIs) very difficult. We propose and program a blockchain-based system that reduces and shares out, among the financial institutions that work with a customer, the costs of the KYC process, and also makes it possible for FIs to dynamically update the information related to the customers and for this information to be disseminated among participating FIs. Additionally, our system solves some of the attributes that hinder the adoption of previous solutions by FIs. The result is a programed, stand-alone solution that can be implemented by FIs to reduce the cost of the KYC process without requiring any central instance to store the customer’s data, and in which FIs share the initial costs of the KYC process, as well as the running costs of keeping the information about the customers up to date. Our system increases the level of security and regulatory compliance in the KYC process, and significantly reduces its costs for all parties involved.

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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
Language:English
Date:1 January 2019
Deposited On:21 Aug 2019 11:07
Last Modified:29 Jul 2020 11:11
Publisher:Inderscience
ISSN:2516-6433
OA Status:Closed
Free access at:Publisher DOI. An embargo period may apply.
Publisher DOI:https://doi.org/10.1504/IJBC.2019.10021398
Other Identification Number:merlin-id:17498

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