Synechron’s Blockchain Accelerator for KYC builds on the industry’s progress and reinvents the existing KYC utility operating model to obtain critical mass, to reduce operating and compliance costs and to improve customer experience. The KYC utilities blockchain model of the future will deliver critical mass to multiply cost savings across the industry, which will in turn present the leading KYC utility with self-perpetuating market leadership. We are building the next-gen KYC utility on blockchain.
The Synechron Blockchain Accelerator for KYC
Blockchain delivers disruptive change by uniquely solving many technology challenges at once. The key operating model enhancements include:
Distributed client data collection delivers critical mass
- Banks will regain ownership of the end-to-end client interaction. Instead of the KYC utilities asking new corporates to consent to sharing their client data, member banks would ask their existing corporate clients for consent to share onto the utility. When another bank requests access to the profile, the corporate confirms its acceptance to share the originating bank’s KYC profile. The originating bank sells the KYC-complete profile, delivering a major contribution to critical mass.
Standardization and automation of policy and operations
- Building on recent progress on KYC policy standardization and with increasingly digital data collection, blockchain can use smart contracts to execute operational and control processes. For example, daily updates of client data from authoritative sources could gradually reduce the requirement for periodic reviews. Where it can be standardized across the industry, KYC controls and workflow routing would be codified into smart contracts and executed automatically. Greater digitization could also enable multilingual solutions via smart contracts and translation tools.
Centralization of risk and controls
- Banks and regulators can achieve tighter control and reduced regulatory risk by limiting human input and driving standardization across the industry. Direct feeds from authoritative sources into the corporate profiles better reduce fraud risk and the scope for human errors, compared to physical documents or customer-entered data fields. Blockchain can enable the constant auto-capture of client data and centralization of sanctions and politically-exposed person (PEP) screening. Key regulatory concerns, such as banks’ processes to allocate anti-money laundering risk ratings, could be automated through more objective criteria, avoiding the race-to-the-bottom approach that has drawn regulatory fines in the past.
Synechron’s KYC accelerator uses the core blockchain functionalities to completely reinvent the KYC utility technology architecture:
- Blockchain’s distributed database enables permissioned nodes (the participating banks) to access, edit, contribute and validate corporate profile data in a trustless environment.
- Blockchain’s smart contracts enable automation of industry standard KYC and AML controls and perform data validation checks.
- The immutable, permissioned and distributed nature of the database removes the single point of failure for cyberattacks.
- Private keys and encryption segregate and restrict client data to the appropriate viewers with data privacy and transfer laws enforced by code.
To learn more about our Blockchain Accelerator for KYC and the work we’re doing email us at firstname.lastname@example.org
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