LeapRate Exclusive… As the technology landscape matures, so does the demand for adequate security measures. Consumers are demanding that information-collecting processes are less arduous and convenient, and corporates are answering.
Just recently announced, IBM decided to streamline its KYC process by implementing blockchain technology to provide added efficiency for consumers to conduct interactions that require authentication. The French Association of Corporate Treasures (AFTE) is also looking into implementing blockchain into their KYC proof-of-concept to manage processes in a streamlined, secure platform.
Katherine Noall, CEO of Sphere Identity, a global identity blockchain-based platform for identity storage and on-boarding, joins LeapRate today to share the current trends and pain-points in the KYC process and the on-boarding of customers with us.
LR: What is KYC and why is it so important in 2019?
Katherine: Know Your Customer (KYC) is a precautionary measure taken to prevent fraudulent activities.
KYC refers to the verification of a user’s identity before the start of a business transaction. A continuing regulatory requirement, KYC is an essential input for Anti-Money-Laundering (AML) processes, making it vital that we develop better ways of automating current KYC processes.
LR: Could you share the current trends and pain-points in the KYC process and the on-boarding of customers?
Katherine: KYC has placed a heavy administrative burden on customers, making products and services less attractive to buy. This burden has led to increased abandonment rates, which in turn, affects a company’s bottom line.
According to a LexisNexis survey on the true cost of AML, KYC compliance costs for businesses are increasing. For companies that need to meet AML compliance, KYC accounts for 14% of AML costs. In addition, the compliance costs are also driven up by the increasing amount of time it takes to onboard a customer, making the whole process quite a tedious one.
LR: Could you explain the process of self-sovereign identity?
Katherine: Self-sovereign identity (SSI) is when a customer is the sole holder and manager of all their personal data. Traditionally, identity solution providers and businesses have had full control of all consumer data when fully self-sovereign platforms only provide the software and have no insights into users’ data. This privacy of a customer’s data is thanks to the architecture and encryption of the SSI platform.
Fortunately for the consent rules set by GDPR and a growing number of other data protection laws, businesses must now be explicit in which data they collect from a customer and state precisely what they will use it for. Self-sovereign identity has imbedded consent.
LR: How is blockchain technology implemented to streamline time and money?
Katherine: One of blockchain technologies’ primary advantages in customer onboarding is data security and tampering resistance. The use of this technology as an onboarding solution leads to a highly secure and faster onboarding. The more automated, the less human handling of onboarding data and documents. With onboarding automation, costs are saved, and if done efficiently, it simultaneously improves the customer experience.
LR: There has been an increasing demand for corporations to seek such alternatives to decrease on-boarding fatigue and provide a seamless user experience.
Katherine: Hit by substantial and rising compliance costs and growing customer dissatisfaction, corporations are seeking alternative approaches to onboarding. Businesses have learned the hard way that compliance requirements need to be automated or pushed to the back of the organisation, far away from the customer.
To achieve seamless customer onboarding, businesses need to replace traditional approaches which include the slow and tedious use of paper and online forms with emerging technology such as blockchain.