New Blockchain Consortium in Middle East Will Improve KYC Efforts Among Banks
The Middle East and South Asia (MEASA) region has formed its first blockchain consortium to bring better efficiency to KYC and data sharing practices between institutions. The Dubai International Finance Centre (DIFC) along with Mashreq Bank has partnered with Norbloc for the solution, as reported by Emirates News Agency, July 31, 2019.
Securing Personal Data on a Blockchain
Norbloc, a KYC platform built on a distributed ledger, will help the consortium share KYC data amongst each other to improve risk management, underwriting, and adherence to regulations. Essentially, Norbloc will focus on driving onboarding and monitoring of customer data over a distributed ledger.
As per the UAE Blockchain Strategy 2021, a Memorandum of Understanding (MoU) was signed with the intent to create a platform that serviced the entire financial services and banking industry in the UAE. This initiative will allow for rapid and secure onboarding.
To add to this, other necessary documentation can be shared via the blockchain to ensure an immutable record of such information being shared.
The mutual benefits arising from the integration of the KYC platform will be governed by an agreement between participating banks, government bodies, financial institutions, and other licensing authorities.
By the first quarter of 2020, it is expected that companies will be able to create a singular KYC record which can be authenticated with an online ID and shared with necessary institutions.
However, if the network isn’t adequately secured and this information falls into the hands of bad actors, it could be disastrous for the entire region.
Privacy advocates believe that procedures like KYC that require storing mounds of personal data on a single database is one of the biggest risks to individual privacy.
The Equifax breach and recent Capital One data leak stand testament to the lack of secure data practices by corporations. In the situation of a consortium, the vulnerability can come from a number of participants and requires high-security data management practices to be standardized across all consortium members.
Brave was recently condemned by crypto Twitter after they revealed customers would need to submit KYC to Uphold to move tokens from their browser integrated wallet.