Blockchain for RegTech: streamlining know your customer (KYC) pipelines

• Main Author: Tan, Valerie Huiying
• Other Authors: Dusit Niyato
• Format: Final Year Project
• Language: English
• Published: Nanyang Technological University 2022
• Subjects: Engineering::Computer science and engineering
• Online Access: https://hdl.handle.net/10356/162931
• Institution: Nanyang Technological University

Financial institutions have to go through regulatory compliance processes when providing services to customers. Among these processes, Know Your Customer (KYC) and Customer Due Diligence (CDD) processes are essential for compliance of Anti-Money Laundering (AML) schemes in order to establish the legitimacy of a customer’s identity before conducting businesses with them. However, there are many problems that currently exist with traditional regulatory compliance systems including high costs to organisations, lengthy and repetitive processes that lead to bad customer experience, duplication of records that are stored, as well as the bundling problem that compromises the privacy of clients’ information. As technology continues to rapidly advance, the delivery of financial services have become increasingly digital. With the growing popularity of blockchain technology, different ecosystems such as Decentralised Finance and the Metaverse, which are built on this technology, have gained large traction. With Decentralised Finance being developed to replace traditional financial services and transactions of virtual land being conducted on the Metaverse, these ecosystems often involve large amounts of money and require regulatory compliance checks. This calls for a solution that can interoperate effectively with these emerging technologies. To overcome the above issues and keep up with the rise in the technology, we present a system using permissioned blockchain technology, which makes use of public and private smart contracts, to shorten these processes and give clients more authority over the data that they are required to present to different stakeholders during KYC and CDD processes.