The increased amounts of data flows have made the demand for correct, secure, and fast remote verification and KYC (Know Your Customer) procedures more urgent.
Digital documents management and remote personal verification remain a complicated and expensive process. Financial organizations, banks, and businesses around the world are now shifting to online, and communications with customers and partners have become digital. The increased amounts of data flows have made the demand for correct, secure, and fast remote verification and KYC (Know Your Customer) procedures more urgent. Financial departments can use blockchain and DLT solutions to improve verification procedures and make the financial sector efficient and accessible for remote performance.
KYC Is a Significant Object of Expenditure
Hong Kong's Private Wealth Management Association (PWMA) and KPMG found in their investigation that 95% of Hong Kong banks
spent most expenses on KYC audits and anti-money laundering (AML). Apart from banks, companies of any kind face high costs for KYC/AML procedures when they start online financial transactions. The development of joint technology projects, consolidated databases, and well-built utilities for cloud banking and e-commerce will significantly reduce the cost and timing of decision-making.
Sharing data management systems and utilities will improve the detection of fraud, money laundering, and unconscionable customer actions. The full picture of customer behavior will reduce the costs of financial institutions and advance the quality of customer service. However, this development must be consistent with the storage and security standards of customers' data. Distributed storage
- DLT - becomes an obvious solution for financial technology utilities.
Why Distributed Architecture Is Needed
Usually, KYC procedures are conducted based on the documents provided. It is the first step in building a relationship between the client and the organization. Existing verification methods
take a long time and are not always accurate. Blockchain architecture, Big Data
, and some other technologies accelerate, protect, and perform this process accurately.
FCE applies these technologies to its digital ecosystem for business
. Business is always closely linked to financial interactions and digital identity. Understanding this, FCE launched several tools based on a distributed ledger.
A distributed database as a data infrastructure center will become a trusted source for personal identity verification. DLT architecture is self-tested, sustainable, and invulnerable storage technology. Every entry, time of each recording is registered and cannot be changed.
In addition to storing records, blockchain architecture includes opportunities to create and sign smart contracts, create full-fledged digital identifiers and electronic signatures. FCE develops a complete financial toolkit
based on its blockchain to bring companies benefits of distributed architecture.
The distributed architecture of the system will deprive the provider or organization that owns the database of the function to modify and remove data. When it comes to personal data, one-way encryption is used. This method allows FCE to verify the identity of the data
without open access to the original documents in the database.
Digital Future for Finances
New DLT-based systems and upgrades of existing utilities will operate data faster by automating processes and reducing calculation time. DLT-based solutions will reduce costs and risks for financial institutions.
Existing technologies can include most of the functions, from scanning document identifiers to full-fledged machine analytics and Big Data-based decision-making. The development of fintech makes the financial sector more manageable and accessible, but new technological solutions, such as DLT, bring it the power of attorney and security. This benefit, at a lower cost, makes the DLT system a promising tool for cloud banking and remote financial interactions.