Blockchain consortium BankChain has unveiled a new blockchain KYC system, designed to help banks and financial institutions with more streamlined customer onboarding.
The Indian consortium, which was launched in February, draws together efforts from major Indian financial companies like ICICI Bank and State Bank of India, and is working in conjunction with Microsoft, IBM and a range of other local partners in developing the new framework.
Known as ‘ClearChain’, the project allows banks to use blockchain protocols to more effectively exchange data about customers, in a bid to help alleviate the compliance burden of KYC (Know Your Customer) requirements.
The ClearChain protocol will also make it easier for information about suspicious transactions to be shared between companies, as well as the exchange of data on bank wire transfers.
ClearChain is far from the only project being investigated by BankChain, although it remains the most significant to date. Other projects in the works include a blockchain solution for detecting fraud in business financing.
Sudin Baraokar, a representative from State Bank of India engaged in the project, said the group was dedicated to finding ways in which current banking systems and structures could be improved by blockchain technology.
“We are exploring how blockchain can help in reducing fraud where a borrower takes a loan against the same asset from multiple banks. We are also looking at inward remittances and the use of blockchain as an alternative to systems like SWIFT.”
The news will be met with anticipation within the Indian financial community, as well as among banks and other financial institutions worldwide.
With blockchain technology thought to hold significant potential for a range of industries, the BankChain pilot scheme could help shape the next generation of innovations on the tech.
The Reserve Bank of India and the Indian Stock Exchange are also engaged in similar research and development work for the blockchain, underlining its potential to overhaul the systems and processes currently central to the Indian banking and payments sectors.
With organizations worldwide engaging in similar projects, BankChain’s decision to launch the pilot project will be closely monitored for its efficacy.