The R3 consortium is exploring the regtech space with 10 of its member banks working on a proof-of-concept for a blockchain-based know your customer (KYC) registry.
The firms involved in the three-month project aimed to develop a distributed-ledger that can address the challenges of KYC requirements.
The 10 banks involved are BBVA, CIBC, ING, Intesa Sanpaolo, Natixis, Nordea, Northern Trust, Société Générale, UBS and US Bank.
KYC is used to fights fraud and money laundering but is often expensive and inefficient for banks with Thompson Reuters claiming it can cost institutions as much as $500m a year.
R3 says the proof-of-concept was designed to show how distributed ledgers can help reduce the cost and time consumption of onboarding new customers as well as offering increased transparency and security.
The shared platform can allow each participant to manage their own identities as well as gain permission to access identities from other organisations using the distributed ledger.
R3 CEO David Rutter said, “The growing complexity and cost of KYC compliance requirements presents a major challenge for banks on-boarding new clients and is having a negative impact on those client relationships.
“Distributed ledger technology can provide a unified view of clients whilst also significantly reducing costs and time spent verifying identity.”
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