Blockchain in the KYC Process – An Appropriate Corporate Treasury Use Case?

Abstract

This article deals with the appropriateness of the blockchain technology to improve existing KYC procedures, which are often described as lengthy, costly and cumbersome. Moreover, similar identification processes need to be carried out repeatedly for several institutions, which creates considerable inefficiencies and avoidable costs. The use of a blockchain design with smart contracts offers the possibility to avoid redundant workflows and entails several benefits such as enhanced security, trust and flexibility. This illustrates that the blockchain technology, which is still in a maturing phase, has the potential to play an important role in streamlining and (to some extent) automating current KYC processes. In terms of security, trustworthiness or customer satisfaction, the technology may offer game changing opportunities (not only) in the realm of authenticated user identification or digital identity management.