Blockchain-based KYC platforms will allow for the active monitoring of everything from account openings to day-to-day transactions. When combined with smart contracts that will have predetermined criteria to spot fraudulent activity etc., these new platforms will be able to alert banks to any wrongdoings.
The immutability aspect of blockchain is also quite handy in the context of creating trust between parties involved in the KYC process. The ability to trust data stored on a KYC blockchain software solution removes the need for secondary validation processes or cross-checking.
Finally, a distributed ledger system makes the reporting and communication processes more efficient, saving time and money. Since parties can easily access reliable data, processes, mistakes. and fraud can be detected far more quickly.
This is particularly true when it comes to mistakes, which with conventional systems, take a lot of time to be identified, reported, and solved.
KYC blockchain implementation is not limited to banks or financial institutions. There is a wider scope of application among industries that require authenticated user identification.
The KYC registry on a blockchain could be accessed by many industries in addition to banks and other financial institutions. Many of these small companies and organizations require these data for different purposes such as verifying identifications before issuing membership cards etc.
Tax authorities could also access it to speed up their internal processes. Other industries that require user data from such registries include judicial, credit rating agencies, stock exchanges and so on.