There is always a great debate going on regarding the fact that how blockchain can utilize KYC services and ICOs can get help from AML compliance solutions. But there is another interesting side to this story as well. KYC verification and AML Screening software also have a lot to benefit from blockchain as well. Especially with compliance guidelines such as GDPR, that require businesses to ensure the safety of user data or else they will be fined millions of euros in monetary penalties, KYC software can really take help from blockchain technology. Blockchain will give the necessary peace of mind to KYC verification and online identity verification solution providers that collect valuable personal information from end-users.
Why Blockchain technology?
Blockchain technology is a state of the art digital technology that allows for only secure access to centralized resources. Any KYC service provider or AML software company that collects personal information from end-users is at great risk of losing it during a data breach or hacking attack. In order to secure such a substantial dataset from falling into wrong hands or to simply getting exposed, there could be no better solution then blockchain. All the data collected from end-users can be stored into a blockchain where only limited persons can access it for analysis purposes for tracking users for research purposes.
Risks Involved with KYC
These days, not only ordinary citizens are getting concerned about their data privacy but the national governments have also become vigilant in this regard. Authorities have started issuing guidelines to ensure data security, especially for the data collected from users of online services. GDPR is a perfect example of such guidelines. Passed by the European Union, this legislation binds businesses to secure user data that they have collected to provide services to their clients. Businesses failing to comply with these guidelines can be fined up to millions of Euros. So clearly KYC businesses operating inside EU or even on a global level are prone to these strict guidelines. Blockchain serves to be the perfect answer to these official concerns regarding data collection and data safety.
AML Compliance & Blockchain
Blockchain technology can benefit AML compliance solution that is also offered by several online identity verification systems such as Shufti Pro. A secure databank can be hosted on blockchain which will make it highly classified and thus devoid of any risk of being tampered with. AML based background checks can then be performed through this comprehensive databank of people that pose a financial risk. A product lie Shufti Pro even updates its centralized data bank every 14 minutes to make their AML Compliance solution even much more customer friendly and to perform real-time AML screening on behalf of its customers. Even FATF designated risk levels for Politically Exposed Persons (PEPs) are fully integrated into the AML background checks offered by Shufti Pro.
It is interesting that 2 technologies can work in synergy with each other and can even support each other to better operate much more efficiently.