How Blockchain Can Automate KYC: Systematic Review

Since the advent of cryptocurrency, Blockchain has evolved as a promising technology towards diverse application areas such as education, healthcare, supply chain management, etc. Various institutions, essentially, the financial institutions, use traditional Know Your Customer (KYC) for the identity verification of a customer. However, KYC being manual and labor-intensive process, the repetitive task of onboarding different institutions by any customer makes it cost inefficient. With decentralized Blockchain technology, the overall efficiency of KYC can be increased manifold in terms of improved speed, minimum onboard time, reduced risk and total cost involved. In the paper, we conduct a PRISMA guided systematic review on the use of Blockchain technology for KYC and its application areas from 2014 onwards. Lastly, the Blockchain platforms such as Ethereum and Hyperledger along with related case studies have been presented followed by future directions in KYC.

[1]  Mark Manulis,et al.  KYChain: user-controlled KYC data sharing and certification , 2020, SAC.

[2]  Jørgen Ellingsen.  Self-Sovereign Identity Systems: Opportunities and challenges , 2019 .

[3]  Omri Ross,et al.  KYC Optimization Using Distributed Ledger Technology , 2017, WI 2017.

[4]  M. Campbell‐Verduyn,et al.  Bitcoin, crypto-coins, and global anti-money laundering governance , 2018 .

[5]  Giuseppe Destefanis,et al.  Blockchain Application for Central Banks: A Systematic Mapping Study , 2020, IEEE Access.

[6]  Evolution or revolution , 2018 .

[7]  Michael Kuperberg,et al.  Blockchain-Based Identity Management: A Survey From the Enterprise and Ecosystem Perspective , 2020, IEEE Transactions on Engineering Management.

[8]  Miss Laiha Mat Kiah,et al.  Blockchain Technology the Identity Management and Authentication Service Disruptor: A Survey , 2018, International Journal on Advanced Science, Engineering and Information Technology.

[9]  L. Sloboda.  Cost-management in correspondent banking relationships , 2017 .

[10]  Chirag Modi,et al.  Optimizing e-KYC Process Using Distributed Ledger Technology and Smart Contracts , 2019 .

[11]  Kai Petersen,et al.  Systematic Mapping Studies in Software Engineering , 2008, EASE.

[12]  Prashant Upadhyay,et al.  Software Wallet Based Secure Participation in Hyperledger Fabric Networks , 2020, 2020 International Conference on COMmunication Systems & NETworkS (COMSNETS).

[13]  A. Sarkar,et al.  Fintech in Europe and Central Asia , 2020 .

[14]  Tooska Dargahi,et al.  A systematic , 2022 .

[15]  Radu State,et al.  Demo: Blockchain for the Simplification and Automation of KYC Result Sharing , 2019, 2019 IEEE International Conference on Blockchain and Cryptocurrency (ICBC).

[16]  Mariusz Nowostawski,et al.  Self-Sovereign Identity Systems , 2019 .

[17]  V. Pankov,et al.  Foreign and Russian Experience of Blockchain Digitization by Central Banks, Financial, and Technology Companies , 2020 .

[18]  J. Thavanathan.  Process Innovation with Blockchain in Banking - A case study of how Blockchain can change the KYC process in banks. , 2017 .

[19]  Al Tilooby.  The Impact of Blockchain Technology on Financial Transactions , 2018 .

[20]  Mohammad Nurul Huda,et al.  Transaction authorization from Know Your Customer (KYC) information in online banking , 2016, 2016 9th International Conference on Electrical and Computer Engineering (ICECE).

[21]  Mehmet Aydar,et al.  Towards a Blockchain based digital identity verification, record attestation and record sharing system , 2019, ArXiv.

[22]  Nikita Singhal,et al.  Smart KYC Using Blockchain and IPFS , 2020 .

[23]  Amit Bhagat,et al.  Blockchain Technology: Limitations and Future Possibilities , 2021 .

[24]  Radu State,et al.  Blockchain-Based, Decentralized Access Control for IPFS , 2018, 2018 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom) and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData).

[25]  Erik Hofmann,et al.  Background III—What Is Blockchain Technology? , 2018 .

[26]  Radu State,et al.  Blockchain orchestration and experimentation framework: A case study of KYC , 2018, NOMS 2018 - 2018 IEEE/IFIP Network Operations and Management Symposium.

[27]  Zibin Zheng,et al.  Blockchain challenges and opportunities: a survey , 2018, Int. J. Web Grid Serv..

[28]  Kevin Aksel Andersen,et al.  Innovation alliances: a case study of the Norwegian financial services industry , 2017 .

[29]  Alex Biryukov,et al.  Privacy-preserving KYC on Ethereum , 2018 .

[30]  M. Mainelli,et al.  Sharing Ledgers for Sharing Economies: An Exploration of Mutual Distributed Ledgers (Aka Blockchain Technology) , 2015 .

[31]  José Parra Moyano,et al.  Optimised and dynamic KYC system based on blockchain technology , 2019, International Journal of Blockchains and Cryptocurrencies.

[32]  Mukesh K. Mohania,et al.  Internet of Blockchains: Techniques and Challenges Ahead , 2018, 2018 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom) and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData).

[33]  Balaji Viswanathan,et al.  Value Attribution through Provenance Tracking in Blockchain Networks , 2019, 2019 IEEE International Conference on Web Services (ICWS).

[34]  Dhiren Patel,et al.  KYC as a Service (KASE)—A Blockchain Approach , 2020, Algorithms for Intelligent Systems.

[35]  V. Madhusudanan Pillai,et al.  Supply chain transparency through blockchain-based traceability: An overview with demonstration , 2020, Comput. Ind. Eng..

[36]  Kumar Bhaskaran,et al.  Double-Blind Consent-Driven Data Sharing on Blockchain , 2018, 2018 IEEE International Conference on Cloud Engineering (IC2E).

[37]  Bob Jacobs,et al.  Blockchain consortium networks: Adding security and trust in financial services , 2020 .

[38]  D. Battistini.  Using Blockchain Technology to Facilitate Anti-Money Laundering Efforts , 2016 .

[39]  Barbara Carminati,et al.  Merkle Trees , 2009, Encyclopedia of Database Systems.

[40]  Poonam Saini,et al.  Blockchain based audit trailing of XAI decisions: Storing on IPFS and Ethereum Blockchain , 2021, 2021 International Conference on COMmunication Systems & NETworkS (COMSNETS).

[41]  Burkhard Stiller,et al.  TradeMap: A FINMA-compliant Anonymous Management of an End-2-end Trading Market Place , 2019, 2019 15th International Conference on Network and Service Management (CNSM).

[42]  S. C. Lenny Koh,et al.  Blockchain applications in supply chains, transport and logistics: a systematic review of the literature , 2019, Int. J. Prod. Res..

[43]  Awadhesh pratap Singh,et al.  Sustainable KYC through Blockchain Technology in Global Banks , 2019, Annals of Dunarea de Jos University of Galati. Fascicle I. Economics and Applied Informatics.

[44]  Vinay Kumar,et al.  Distributed Ledger Technology based data minimization of digital identities , 2019 .

[45]  Arshad Jamal,et al.  Blockchain-Based Identity Verification System , 2019, 2019 IEEE 9th International Conference on System Engineering and Technology (ICSET).

[46]  S. Sasirekha,et al.  Optimised KYC Blockchain System , 2020, 2020 International Conference on Innovative Trends in Information Technology (ICITIIT).

[47]  Tore Dybå,et al.  Empirical studies of agile software development: A systematic review , 2008, Inf. Softw. Technol..

[48]  A. Yadav,et al.  KYC Optimization using Blockchain Smart Contract Technology , 2020, International Journal of Innovative Research in Applied Sciences and Engineering.

[49]  L. Safina,et al.  The potentials of smart contract in Islamic trade finance , 2019, Fintech In Islamic Finance.

[50]  Harmeet Khanuja,et al.  Hassle - Free and Secure e-KYC System Using Distributed Ledger Technology , 2021, Int. J. Next Gener. Comput..

[51]  Alexandra Giannopoulou,et al.  Self-sovereign identity , 2021, Internet Policy Rev..

[52]  Omri Ross,et al.  Optimized and dynamic KYC system based on blockchain technology , 2019 .

[53]  Uyen Trang Nguyen,et al.  A New Approach to Client Onboarding Using Self-Sovereign Identity and Distributed Ledger , 2018, 2018 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom) and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData).

[54]  Pearl Brereton,et al.  Systematic literature reviews in software engineering - A systematic literature review , 2009, Inf. Softw. Technol..

[55]  Nick Szabo,et al.  Formalizing and Securing Relationships on Public Networks , 1997, First Monday.

[56]  S. Arvanitis.  P2P Lending Review, Analysis and Overview of Lendoit Blockchain Platform , 2019 .

[57]  V. D. Kolychev,et al.  Methods and Mechanisms of a Subsystem Formation of Financial Monitoring of Suspicious Operations in Commercial Bank , 2018 .

[58]  R. Cheung,et al.  A survey of breakthrough in blockchain technology: Adoptions, applications, challenges and future research , 2021, Comput. Commun..

[59]  Ahmed Abuhalimeh,et al.  A Comparative Study: Blockchain Technology Utilization Benefits, Challenges and Functionalities , 2021, IEEE Access.

[60]  Yuan Liu,et al.  A Blockchain based Identity Management System Considering Reputation , 2019, 2019 2nd International Conference on Information Systems and Computer Aided Education (ICISCAE).

[61]  Jian Zhang,et al.  Applying blockchain technology to improve agri-food traceability: A review of development methods, benefits and challenges , 2020, Journal of Cleaner Production.

[62]  Hossein Hassani,et al.  Banking with blockchain-ed big data , 2018, Journal of Management Analytics.

[63]  Ghassan O. Karame,et al.  On the Security and Scalability of Bitcoin's Blockchain , 2016, CCS.

[64]  Ye Guo,et al.  Blockchain application and outlook in the banking industry , 2016, Financial Innovation.

[65]  Piyush Yadav,et al.  Transforming the Know Your Customer (KYC) Process using Blockchain , 2019, 2019 International Conference on Advances in Computing, Communication and Control (ICAC3).

[66]  Robert Christie,et al.  Setting a standard path forward for KYC , 2018 .