Role of Blockchain in Enterprise KYC | OnGraph

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2. Role of Blockchain in Enterprise KYC KYC checks are now entering the mainstream but not narrowed to Banks and Financial Institutions. Commercial organizations of diverse industries such as manufacturing, retail and services need to implement KYC checks as a screening process. Increasing number of money laundering, financing of terrorism and criminal behaviors, Governments around the world proposed legislation to maintain an efficient KYC process. Blockchain Development Services While there have been regulatory requirements for banks and insurance companies to ‘know’ their customers, there is generally no legal obligation for non-financial organizations to conduct integrity screening. Though non-financial organizations may not always be legally required to screen customers, they suffered reputational damage.

3. Let’s Understand The Importance of KYC in Enterprises/Commercial Organizations Uber: Uber Technologies Inc. is a global ride-sharing service provider. Uber has been prominent in the sharing economy, but has also been the subject of protests and legal actions since Uber’s drivers were accused of sexually assaulting passengers. The following incidents raised questions company’s screening efforts on drivers. In California, proposed legislation titled Assembly Bill 24 would require ride-share drivers to undertake fingerprint checks and further screening before acquiring driver permits. While Uber has defended the safety measures it currently has in place, additional incidents by drivers against customers (for example in India) have added to the pressures the company faces.

4. Home Advisor: This Colorado-based digital marketplace claims to connect homeowners with pre-screened local service professionals for complete home assistance. However, in a recent event, one of the site’s user claimed website’s screening might be inadequate and that it possibly list unlicensed contractors. She also claimed she was about to hire a professional but in reality, the contractor was unlicensed and had a criminal record. Airlines: Airlines have always been easy targets of terrorist and terrorist activities. However, airlines are often relying on airport institutions and immigration departments to do the screening for them. Hire Blockchain Developers On the other hand, Department of Homeland Security released a report that concludes the weaknesses in the (Transportation Security Administration in the United States) TSA’s screening processes for airport workers, stating that the TSA allowed 73 individuals with possible links to terrorism or ‘terrorism-related’ information to access high-security areas within airports. The following report questioned the screening procedure of TSA and raised concern on the institution’s ability to adequately screen airline customers and suggest airlines to conduct their screening.

5. Blockchain in KYC Despite the significance of these processes, KYC at financial institutions is an inefficient, time-consuming and labor-intensive manual processes. Moreover, it’s been prone to duplication of effort as well as a risk of error. Information gathering and processing are the two factors which took over 80 percent of the effort for KYC while only 20 percent effort requires in assessing and monitoring information for critical insights. This leads to a tiresome process, repetitive questioning and long processing times that causes frustrating experience for consumers. As the convergence of operational, regulatory, cost and customer experience challenges, it is clear that a change in KYC is needed. Technology may be an answer – but is Blockchain Application Development Services the right solution?

6. Benefits of a blockchain KYC utility Blockchain ensures a streamlined way for financial institutions to gain swift and secure access to clean and up-to-date customer data due to its immutability and transparency features. This boost of greater operational efficiency increased trust between institutions and reduction of labor-intensive data gathering, processing time and costs. The evolving technology provides a single source of customer data for better understanding and visibility of customer activity across institutions. With blockchain-enabled KYC utility, a customer also experiences reduced onboarding wait times and escape such repetitive questioning for information validation. Corporate industries which are struggling with reputational damage understand the importance of blockchain-enabled KYC utility in regaining the public trust. Together with banks and financial service providers, commercial organizations also find blockchain development a cost-efficient way to conduct more detailed customer screening (KYC process).

7. A Blockchain-Enabled KYC shared ledger platform benefits all stakeholders by: Enabling Greater Transparency: Private and immutable ledger enables sharing of KYC information across banks in a transparent and secure manner Reducing Operational Inefficiencies: Reduces customer onboarding time and enhances the customer experience Enabling Up-To-Date Customer Data: A single source for customer data reduces the potential for fraud by inhibiting data ambiguity

8. Organizations That Will Be Benefited With Blockchain Supported KYC Different organization realizes the importance of Blockchain-enabled KYC utility to validate the integrity of their customers. Here are some of the use-cases of commercial organizations that will significantly benefit from the screening process. Healthcare: Healthcare companies which are active in the trading of drugs to the healthcare institutions and hospitals can conveniently assess the hospital’s knowledge, and service. This help the traders to be satisfied that the hospitals will use the drugs correctly and keep them according to set industry standards. Blockchain-enabled KYC screening reduces the chances of illegal trading of drugs, highly toxic and dangerous products. Lodging and Travel: In the past few years, lodging and traveling service have been used to execute several terror/criminal activities around the world. As the legislation become strick in every country to ensure the safety of citizens and tourists, accommodation providers are required to validate the integrity of customers. Here, blockchain technology enables service providers to screen potential renters while allowing them houses or rooms on rent to lower the risk of them using the location for an illegal purpose.

9. Outsourcing Vendors: Outsourcing technology solutions for mobile and web-based (i.e., SaaS) needs is a trend of today. However, the service can be misused as it is tough for IT companies to validate the identity of the client which sits offshore. With the help of Custom Blockchain Technology Development Services, outsourcing vendors would be able to check a client’s past criminal history to prevent a crime that technology could facilitate. Fraud in payment transactions will reduce since KYC screening also help vendors ensure that persons does or doesn’t impose of any economic or other sanctions by the government. E-commerce: E-commerce industry has been on an upward growth trajectory, so as the increasing fraud rates with buyers. The online marketplace is used by third-party sellers to sell products/services. Here a background check on sellers is required to make sure no illegally-acquired, counterfeit, grey-market or stolen material is sold over the website/mobile that is inappropriate for specific audiences. It is the online marketplaces which have to deal with reputational damage due to any fraudulent activities. Blockchain solution will help the industry significantly.

10. Transportation Network Industry: Car and another type of vehicle renting services have been on the surge from past many years. Unfortunately, the service misused to execute several illegal and criminal activities. KYC screening based on blockchain network help the service provider to validate the authenticity of a customer’s driving credentials and know about the driver whether he/she imposed of any illegal activity, suffering from any mental illness or has had restrictions on their activity. Mileage Program Runners: Airlines, car-rental and alike companies today facilitates customers to register for a mileage program. These services invite security violations if misused by the individual subjected to sanctions by governments, banned from travel on no-fly lists, etc. Blockchain-enabled KYC utility airlines and other service providers to cope with the security challenges which has several bottlenecks.

11. Is A Blockchain KYC Utility The Answer? As we mentioned, the end-to-end KYC verification process involves a significant portion of time, cost and effort, leaving fewer resources to monitor customer behavior for anomalies. It is time to flip this ratio with evolving technologies. A clean and up-to-date customer data reduce screening and verification time, freeing up resources to focus on more complex KYC challenges. Since the technology reduces obstacles and inconvenience of acquiring KYC information, companies of all domain become better able to advance their commercial business agendas. Not only it enables improvement in efficiency, but also corresponding reduced cost. Simultaneously, the customer experience will improve, and overall customer satisfaction will increase. Nonetheless, a blockchain utility does not solve all the KYC issues but demonstrates strong potential to help Banks, financial institution and other commercial organizations to lower the burden of time and cost associated with KYC processes, while providing greater visibility to regulators and a better experience for customers. What’s your pick from the information? Will, does blockchain be a true help for enterprise KYC? We would love to hear from you!

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