Three Asian banks and a regulator in Singapore have developed a new blockchain proof-of-concept aimed at streamlining the know-your-customer (KYC) process.
OCBC Bank, HSBC Singapore and the Mitsubishi UFJ Financial Group (MUFG) jointly announced the customer identification system along with the Info-communications Media Development Authority (IDMA). The IDMA regulates the city-state's media and information communications industries.
The proof-of-concept phase took place between February and May of this year, according to the firms involved. The aim was to shift away from cumbersome, paper-based approaches – which can take days or longer to complete – to wholly digitized ones. By including a shared ledger, banks can verify a customer by turning to information that is being stored and updated overtime.
In a statement, IDMA expressed support for tests of this nature, particularly through the lens of broader work within Singapore on developing new systems to serve an increasingly digital economy.
CEO Tan Kiat How said of the trial:
"IMDA supports the ambitious use of technologies to transform businesses and create value to citizens. This willingness to experiment is crucial in achieving our vision of a dynamic Digital Economy for a Smart Nation. Revamping the KYC process using blockchain technology is one such example. We are heartened that financial institutions are developing innovative FinTech solutions to improve productivity and deliver a better experience to their customers."
As for the results of the trial, the banks said that the outcome was mostly positive. According to OpenGov Asia, the group reported that the system saw significant uptime during operation and was resistant to tampering attempts.
Looking ahead, the banks are said to be leaning toward additional testing. According to Nikkei, a representative for OCBC said that the group would explore how it might approach launching larger-scale trials.
Image via Shutterstock