Singaporean regulator Infocommunications Media Development Authority (IMDA) has partnered with three Asian banks for the trial of a new Blockchain technology-based customer identification system proof-of-concept to streamline the know-your-customer (KYC) process.
The banks are OCBC Bank, Mitsubishi UFJ Financial Group (MUFG), and HSBC Singapore.
According to IMDA chief executive officer (CEO), Tan Kiat How, the trial forms part of their strategy to create a dynamic digital economy.
“IMDA supports the ambitious use of technologies to transform businesses and create value for 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.”
Highlights of the KYC trial
The partners conducted the proof-of-concept phase of the system in February-May 2017. The goal of the trial was to develop a system that would shift away from the burdensome paper-based processes that can take days to complete, to fully digitized ones.
Under the Blockchain-based shared ledger system, banks can easily verify a customer by using the information that is being stored in the system and regularly updated over time.
Partner banks have claimed that the results of the trial are mainly positive, and they are looking for additional testing in the near future.
A report from OpenGov Asia, meanwhile, stated that the trial showed a significant uptime during operation while using the system, and the system was able to resist or block all tampering or hacking attempts.
The KYC process is claimed to play a key role in fighting anti-money laundering (AML) activities and the funding of terrorism.
Singapore is also currently leading initiatives to use Blockchain payments for unbanked migrants.