So finally you have decided to go with your start-up. Fortunately, your start-up idea is also one in million. In short, soon you are going to be next Mark Zuckerberg or Steve Jobs. Great!
But let me remind you that idea alone is not enough to win the battle. To set the wheels in motion you need to Know Your Customer (KYC). And mind it! Better you know your customer, better will be the chances of your start-up to soar up.
The task of knowing the customer becomes even more significant when the business involves financial services. To overcome this daunting task big business houses often hire services of companies assisting in KYC. But this further is a time-killing exercise. Moreover, security issues of sensitive data arise as many third-party entities are involved in hiring services to know customers.
Besides this, hiring third-party KYC services is a costly affair which further leads to draining of capital thereby shrinking the profit margins.
But, what about the start-ups? Are they that fortunate and financially sound to hire such costly services? Definitely not!
Moreover, despite having sufficient funds, the scenario of big corporates houses is also not that good when it comes to KYC even up to a satisfactory level. Then what is the solution? How can business houses overcome this problem in a more economical and efficient way?
No need to go in much depth. Solution indeed is with blockchain technology.
Yes, the same Blockchain technology that is powering the big digital currencies like Bitcoin. The regime of blockchain is quite vast and the real beauty of this path-breaking technology is that it can be integrated with other applications as per the specific requirement of the user.
Blockchain is actually a public or decentralized ledger that is completely autonomous as it is spread over thousands of computers. Being an open-source system it is extremely transparent also.
To get more insights about blockchain application development.
Now, let’s see how blockchain technology is addressing the problematic issue of KYC.
First and foremost, requisite for doing KYC is the collection and compilation of huge data that comprises of personal, financial and legal details followed by checks and verifications.
Despite of following digital methods, there is no single platform for registering such details. Hence, all business houses on their own repeat this process every time whenever they register a new customer on their platform.
Addressing this prominent problem that’s exactly where the blockchain plays a crucial role.
Using blockchain technology a customer enters all his/her details on a block required for KYC which is stored in encrypted form. The systems automatically generate an individual private password for each user registered on the public ledger.
Now, to register with a new company or service provider a customer just needs to share his/her private password generated by blockchain.
As blockchain is a shared collective public ledger having open, transparent and easily accessible data, hence once customer details are registered it becomes immutable and can be accessed anytime from anywhere simply by putting the password provided to the user.
The crux is that blockchain acts as a common facility or repository comprising all customer data. This simply means blockchain completely terminates the cumbersome process of repetitive independent process of data collection and compilation.
Furthermore, as the cost of one-time collection and compilation on the blockchain is shared among users, hence it dramatically reduces the economics of the KYC process. Additionally, being a completely automatic process it speeds-up the KYC process which if done conventionally generally takes 10-30 days.
Best is that as blockchain is decentralized in nature hence it is practically impossible for a hacker to hack each computer on the network. To put in other words, we can say that blockchain technology applications are not only making KYC process speedy and smart but also secure than ever before.
Bottom-line is that blockchain technology is the new age Savior for financial institutions like banks, insurance companies, mutual fund agencies and many more.
Blockchain technology is drawing a broader, big picture and putting customer data in the right context thereby making KYC process digitalized in true essence.
So, the time is ripe to go for blockchain development solutions and adoption to avoid costly mistakes done in the past.
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