KYC Is A Challenge For Crypto. Blockchain May Be The Solution

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Blockchain
Blockchain

The backbones of a financial institution’s anti-money laundering measures are its KYC processes. Blockchain Learn how firms are revolutionizing the time-consuming procedure.

The backbones of a financial institution’s anti-money laundering initiatives are its Know Your Customer (KYC) practices. According to current projections, global KYC spending might reach $1.2 billion by 2020.

Drawback Of The KYC System

With such a large amount of money being spent on improving KYC processes, it’s tempting to think that the process will be unhackable and error-free. Despite the critical nature of the procedure, KYC continues to be inefficient.

Because of the labor-intensive and time-consuming activities, the wide scope of effort duplication, and the risk of error, it’s estimated that 80 percent of KYC efforts are concentrated on obtaining information and processing, while only 20% are focused on analyzing and monitoring.

While the current KYC process fails to meet the needs of financial institutions, it is an inconvenient experience for customers. It is tedious, long, and repetitive

Several financial institutions and service providers have offered a ray of hope to the situation by incorporating new-gen technologies like cognitive technologies and AI.

Out of this comes out q technology that we believe carries the key to eliminating efficiencies and duplication in KYC processes – Blockchain

The Blockchain For KYC process

The process of using Blockchain for KYC happens through multiple stages in a Distributed Ledger Technology.

Is Blockchain Development the Solution to KYC Problems?

In the KYC process, gathering and processing information consumes a significant amount of money, time, and effort, leaving very few resources available for monitoring and analysing user behavior for abnormalities.

Blockchain technology in KYC can reduce the time required for arduous processes by providing quick access to up-to-date data, which can then be used to identify answers to more complicated KYC difficulties.

However, blockchain will not be able to fix all of KYC’s problems. Financial organizations must continue validating the data once it has been acquired. To achieve better efficiencies, AI and cognitive processing-like technologies must be used.

In its current condition, blockchain, when combined with other technology, has the potential to transform the world

Conclusion

If you want to explore this side of Blockchain development services or are seeking to validate your decentralized KYC-based idea, get in touch with us- Marketcapitalize, your one-stop solution for all things crypto.

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