Singapore Regulator: Banks Complete KYC Blockchain Prototype

Singapore Regulator: Banks Complete KYC Blockchain Prototype

Singaporean government and many banks will deliver the first-ever KYC blockchain proof-of-concept.

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A consortium made up of many leading banks, and the Singaporean government has recently completed the ASEAN regions first-ever, proof-of-concept blockchain dubbed Know Your Customer (abbreviated as KYC).

The country’s media and information regulator, IMDA or Infocomm Media Development Authority of Singapore has collaborated with a number of the leading global banks in the country to deliver the first-ever KYC blockchain proof-of-concept. Other banks in the consortium, includes the HSBC, OCBC Band, and MUFG (or Mitsubishi UFJ Financial Group, among others.

KYC blockchain utilizes distributed ledger technology, which enables information to be accessed, recorded, or even shared across a dedicated network among the participating banks. In a nutshell, these banks will be able to validate, register, and share customer info with the customer’s consent in a secure, efficient, and timely manner.

The blockchain encrypts information, which can also be validated by other government agencies, tax authorities, registries, or credit bureaus. The seamless process eliminates the need for manual checks for both customers and banks.

The security, scalability, and functionality of the prototype were subjected to dry runs between February and May this year. The results revealed that the blockchain proficiently despite the high volume of customer information. It also proved to be resistant to tampering by third parties.

A robust platform for securing the details of customers is one of the critical components of an efficient and reliable KYC info-sharing solution, particularly in the outcome of the Equifax data breach that saw almost half of the population in the US affected.

For a country like Singapore, which has always been in the forefront adopting technologies, the step to embrace blockchain technology just coincides with its agenda about forward-technology.

The chief executive of the IMDA, Tan Kiat How, had to say the following regarding KYC blockchain prototype, “The willingness and readiness to experiment is imperative in achieving the vision and mission of a dynamic digital economy for a technology nation. Embracing the move to use KYC blockchain is just one of the best examples. With these solutions, financial institutions will be able to deliver a better experience and improve productivity among their customers.”

It should be remembered that Singapore has in the recent past tested digitization on a blockchain of the national currency tokens, thanks to the FinTech Hub. In June, it was reported in the CCN that central bank of Singapore used a privately owned blockchain-Ethereum, to digitize Singaporean dollar as part of a joint endeavor with the NW-based R3 startup industry.