KYC Optimization Using Distributed Ledger Technology

José Parra Moyano, Omri Ross*

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

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The know-your-customer (KYC) due diligence process is outdated and generates costs of up to USD 500 million per year per bank.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.
Original languageEnglish
JournalBusiness and Information Systems Engineering
Volume59
Issue number6
Pages (from-to)411-423
Number of pages13
ISSN2363-7005
DOIs
Publication statusPublished - 1 Dec 2017
Externally publishedYes

Keywords

  • Blockchain
  • Know your customer
  • Banking

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