Smart KYC Using Blockchain and IPFS

Know your customer, also known as know your client or simply KYC, is the process that businesses and financial institutes must employ to identify their clients and assessing any kind potential risk due to illegal intentions and foul play for the business relationship in compliance with a national regulating body. The term KYC is often used to refer the bank regulations and the anti-money laundering regulations which are in place to govern such activities. Also due to bribery and foul play, companies of all sizes are compelled to employ KYC for the purpose of ensuring their consultants, agents, or distributors follow rules set by anti-bribery compliant. With population of India around 1.3 billion, a secure and faster system for sharing sensitive information like KYC document which may contain personal document, capable of handling this vast amount of this data is of high demand. While the implementation of such a system isn’t new, the present systems have drawbacks. The proposed system will replicate the functionality of the legacy KYC system. By using the immutable property of Distributed Ledger Technology (DLT) and Inter Planetary File System (IPFS), a tamper-proof system can be formed. This paper aims to address some of the shortcomings of the current system and propose implementation of innovative features to develop a more secure and comprehensive system. The proposed system will allow customer and business institute to verify and record the customer KYC document into the DLT. The proposed system will use IPFS which will greatly improve the storage efficiency of DLT.