Thinking beyond the Bitcoin hype
Opening a bank account may sound like a simple and straightforward thing to do, but it requires a strict process to identify and verify the future account owner. Banks perform a rigorous background check during the onboarding of every new customer as is required by European and Belgian laws. This onboarding process is known as Know Your Customer (KYC) and can be very time-consuming. It is also a challenging process due to the many compliance requirements in the sector. In collaboration with 4 Belgian banks, we are pioneering an easier way, using blockchain technology.
Blockchain is a decentralized network
Blockchain technology was originally designed in 2008 for Bitcoin, a digital currency. In the meantime, the tech community is starting to discover its many possibilities.
Blockchain is actually a network that encrypts and stores all types of data in blocks. This data is shared with everyone who has access to the network and isn’t stored in any single location. Instead, the data is kept across multiple computers, which literally makes it a chain of (identical data) blocks.
This means that:
- The data is not controlled by one single entity
- There is no single point of failure
The design of blockchain ensures that the data is reliable. If a member of the network adds new information, all other members in the network must validate it.
Changes to existing data are added on top of the original data and are again validated by every member. As a result, the data is guaranteed to be correct and reliable by consensus.
This makes blockchain a trustworthy environment, which stimulates more collaboration.
Business onboarding on blockchain is faster
Banks have a lot to consider during onboarding. One example is the set of regulations that the EU imposes to combat fraud and money laundering, also known as the Anti-Money Laundering (AML) regulation.
Banks are obliged to check the integrity and reliability during the onboarding of every customer. A lot of this is still manual work in Belgium.
On the other hand, companies go through the exact same process every time they open a bank account at a new bank.
With blockchain, this is a one-off process:
- Company X puts their data in the blockchain network.
- They give their bank(s) access to the data.
- One bank verifies the corporate data.
- If agreed upon by the company the data is shared with the other members in the network.
Personal data in external database
GDPR: corporates’ most feared regulation of 2018. To comply with GDPR in this context, personal data (all information that can either directly or indirectly identify a person) has no place on the blockchain network.
But there is an easy solution: use an external database where you store personal data. Create a secured link to the network if you want to share it. This way your customer retains their ‘right to be forgotten’. If a customer does not want to share their data, he or she will be removed from the external database and, thus, from the blockchain.
Add additional services and grow
You can take it one step further by adding additional services and tools to the blockchain network, for example a fraud management module. Hence, the network filled with corporate onboarding data will grow into a database filled with corporate identities. And what if you could share this data between the companies themselves? This opens up a range of possibilities.
With this corporate identity, organizations will be able to collaborate faster than ever with 100% traceability. It saves companies time and money as blockchain makes it possible for them to publish their data only once. They manage their own information and choose which parties they share it with.
For more information on how to use blockchain for corporates, feel free to contact Frank.