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(1 December 2017 – Asia) OCBC Bank, HSBC and Mitsubishi UFJ Financial Group (MUFG), together with the Infocomm Media Development Authority (IMDA), has successfully completed a proof-of-concept for a Know Your Customer (KYC) blockchain.
The KYC blockchain – running on a Distributed Ledger Technology (DLT) platform which enables structured information to be recorded, accessed and shared across a distributed network using advanced cryptography – allows banks to collect, validate and share customer information – with the customer’s consent – accurately, efficiently and in a secured manner. This vastly reduces the duplication of information and manual checks for both banks and customers, while enhancing the quality of the customer information that is stored.
The prototype’s performance was tested between February and May 2017 for its functionality, scalability and security. It remained stable even with a high volume of information flow, was resistant to tampering by third parties and maintained confidentiality by permitting access to the ledger’s information only with legitimate authentication.
Head of E-Business, Business Transformation and Fintech and Innovation Group at OCBC Bank, Pranav Seth said, “This partnership fans the spirit of cooperation among competitors as well as regulatory and government bodies, and we hope this will help foster and inspire more of such collaborative innovation initiatives. Our pioneering efforts have resulted in a KYC process that will not only enhance customer convenience, but will improve the industry’s operating efficiencies while reducing financial fraud and crime.”
Head of Financial Crime Compliance, HSBC Singapore, Beaver Chua added that: “Financial crime has in the past had connotations of being ‘low impact’ but this belies the devastating effect it has on people and societies: it threatens livelihoods, ruins companies and bankrupts individuals. In the fight against financial crime, banks play a key role and sharing information is vital.
“The MAS has spoken about the importance for Singapore to “work smarter” in how it fights financial crime in areas like banks’ approach to their “Know Your Customer” due diligence and through its use of technology. The launch of this KYC platform is an accumulation of all of these aims: collaboration, innovation and crime prevention, and HSBC is delighted to have been able to partner in this initiative.”
Deputy General Manager, Asian Systems Office at the Bank of Tokyo-Mitsubishi UFJ said: “MUFG has a well-established global innovation network focused on harnessing the group’s expertise in innovation to transform the way our clients do business. In Singapore, we are proud to participate in various Fintech initiatives such as this redesign of existing KYC processes using DLT, and we look forward to successfully developing a platform that enhances transparency, trust and reliability amongst banks and their customers.”
Tan Kiat How, Chief Executive, Infocomm Media Development Authority said: “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.”
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