Singapore Regulator Teams with Asian Banks For Blockchainbr>
Singapore’s Info-communications Media Development Authority (IMDA), along with three Asian banks, have completed a proof-of-concept for a Know-Your-Customer (KYC) blockchain.
OCBC Bank, HSBC Singapore, Mitsubishi UFJ Financial Group (MUFG) and the IMDA, a statutory board of the Singapore government, said they had successfully completed a way for identity procedures to be carried out using blockchain technology.
The parties said the existing KYC process consists of submitting a set of identification documents each time an individual or corporate customer starts a new relationship with a bank. This manual process also “gives rise to inconsistent information being collected by banks, and customer information not being promptly updated.”
Their KYC blockchain allows structured information to be recorded, accessed and shared across a distributed network using advanced cryptography. Banks can collect, validate and share more accurate customer information with the customer’s consent. 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 this year for its functionality, scalability, and security. According to the firms involved, the prototype 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.”
“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,” said Beaver Chua, Head of Financial Crime Compliance, HSBC Singapore. “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.”
“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,” said Michael Truter, Deputy General Manager, Asian Systems Office, MUFG’s banking entity, The Bank of Tokyo-Mitsubishi UFJ, Ltd. “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.”
“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,” said Pranav Seth, Head of E-Business, Business Transformation and FinTech and Innovation Group, OCBC Bank.