Blockchain technology
has started coming out of the dark shadows cast by cryptocurrency and is now
being utilized for far noble causes these days. Although several platforms that
are now being launched with the help of blockchain technology still have the feature
of cryptocurrency, the extent of their usage has been highly diluted. Most of
the time, they are either used to raise capital for a blockchain based venture
or to perform in-app payments. Even in that case, AML compliance solutions are
utilized to ensure the overall transparency of the ICO process or to vet the
credentials of the users that are investing into the said cryptocurrency.
Greater acceptability of blockchain based technologies has enabled companies to
start using it for different kind of services. KYC verification is also one of
those services.
What
is KYC verification?
KYC basically stands
for Know Your Customer. A KYC verification is performed by businesses and
companies at the time of customer registration. You might remember, remotely applying
for opening a bank account and you were asked to perform facial verification or
document verification. That is what a common KYC actually looks like. In some
countries, it is mandatory by law to collect important information about
clients. In others, businesses conduct KYC verification to avoid online
identity thefts and to prevent registering fraudulent customers.
How
does a KYC verification works?
Why
KYC verification needs Blockchain?
As you can imagine, a
service offering KYC verification or online identity verification services to
businesses has to collect a large amount of important customer information. But
to ensure the safety of such crucial information is also paramount as a data
breach of such information can be catastrophic, to put it mildly. Not only the
reputation of KYC services provider will be tarnished but the company that has
used services from such an identity verification company will also be ruined.
Blockchain has the
ability to secure such large set of data, with its centralized security and limited
access features. As businesses might require the verified credentials of
end-users after some time so it is important to save this personal information
data in a secure repository such as a blockchain. A KYC verification software
integrated with blockchain based data servers is the ultimate tool to safeguard
the interest of a business. It helps to fight off fraudulent elements without
compromising on the data collected from end-users.