KYChain: User-Controlled KYC Data Sharing and Certification
This addresses the problem of costly and cumbersome KYC verification for financial institutions and clients, particularly those with nomadic lifestyles, by providing a user-controlled, privacy-preserving solution.
The paper tackles the inefficiency and privacy issues in Know Your Customer (KYC) processes by introducing KYChain, a mechanism that enables users to share certified, up-to-date KYC data across financial institutions, based on immutable ledgers to ensure confidentiality and compliance.
Under Know Your Customer (KYC) regulations, financial institutions are required to verify the identity and assess the trustworthiness of any new client during on-boarding, and maintain up-to-date records for risk management. These processes are time consuming, expensive, typically have sub-par record-keeping steps, and disadvantage clients with nomad lifestyle. In this paper, we introduce KYChain as a privacy-preserving certification mechanism that allows users to share (certified) up-to-date KYC data across multiple financial institutions. We base KYChain on immutable ledgers and show that it offers confidentiality and certification compliance of KYC data.