E-KYC System Using Blockchain

Abstract

Abstract: Know your client or simply KYC, is a process utilized by businesses and financial institutions to identify their clients and evaluate any potential risks associated with illegal intentions and unethical behavior. The term KYC often refers to bank regulations and anti-money laundering regulations aimed at governing these activities. Due to concerns over bribery and unethical behavior, companies of all sizes are required to implement KYC to ensure their agents, consultants, and distributors comply with anti-bribery regulations. Despite the use of traditional KYC systems, there are limitations to their effectiveness. To address these limitations, a proposed system has been developed that uses the immutable nature of Distributed Ledger Technology (DLT) to create a tamper-proof system. This system enables customers and financial institutions to verify and record KYC documents on the DLT, providing greater efficiency, cost reduction, improved customer experience, and end-to-end transparency in integrating customer documents into the bank's database. Additionally, this system eliminates the need for repeated KYC checks performed by banks through the creation of a secure and common blockchain database. The blockchain's secure nature ensures that unauthorized changes to the data are immediately invalidated and the use of a proof-of-reputation concept makes the verification process more robust.