Enhanced Bank KYC Process using Ethereum Blockchain Framework

Abstract

Abstract—Ensuring compliance with regulatory requirements through efficient Know Your Customer (KYC) processes continues to pose a major challenge for financial institutions globally. Traditional KYC procedures are often inefficient, repetitive, and exposed to significant security risks such as identity fraud, data breaches, and inconsistent verification protocols. As consumer expectations for smooth digital banking interactions rise, current systems frequently fail to balance both security and operational efficiency. This paper introduces a blockchain-driven solution built on the Ethereum platform aimed at enhancing the security and effectiveness of KYC operations. By leveraging blockchain’s decentralized structure, customer data is stored on a distributed ledger, which guarantees data integrity, transparency, and resistance to tampering. The proposed model also grants individuals greater control over their personal information, allowing them to selectively share data with financial institutions, thereby minimizing redundancy and strengthening privacy. Smart contracts are integrated into the system to automate the KYC verification steps, ensuring swift processing aligned with regulatory standards. Additionally, a central banking body is entrusted with managing a complete directory of all involved financial entities and monitoring their compliance with the rules enforced within the blockchain ecosystem.