Distributed ledger technology could assist the banking industry to improve customer verification efficiency
HashCash disclosed in a recent release that it will be collaborating with a UAE based global bank to improve its identity verification system through the integration of “blockchain digital identity”.
HashCash CEO, Raj Chowdhury, emphasises the importance of bank oversight and knowing their clients.
“Accurate identification of an individual is central to banking activities which makes them the chief arbiter of people’s identities. Having a bank account is essential for buying property, securing a loan, and getting a job.”
Though the release did not disclose the bank involved with the collaboration, the release said it will implement a HashCash blockchain-powered digital identity verification system.
How will blockchain make it better?
Blockchain is a decentralised, distributed ledger technology. Any information uploaded to the blockchain will be cryptographically locked and sent to every entity participating in the blockchain.
The ledgers exist on a network of computers and act as backups – in a scenario where an unauthorised individual tries to alter data on the blockchain, it will automatically correct itself by mirroring the existing copies.
In theory, by uploading a person’s identity to the blockchain, the information is immutable.
Blockchain also improves upon the setbacks of the traditional identification process. Using smart contracts, the identification system remains autonomous, avoiding any human error or costly middlemen.
“The existing manual processes make identification time-consuming and susceptible to errors. HashCash aims to streamline the process by helping the partner bank create digital identities for the customers over a decentralized network, where the customer data will be recorded on an immutable ledger, eliminating any chance of identity theft and forgery.”
Demand for new verification systems is high
HashCash “blockchain digital identity” is especially useful in banking processes, such as know your customer (KYC) checks, which are vital procedures for the modern banking industry.
Various countries are entertaining the idea of a blockchain-based KYC system, such as Australia, the Spanish banking consortium, Sri Lanka, and especially the UAE where the system is already live.
HashCash products could possibly assist and encourage the global adoption of blockchain.
“The integration of blockchain-based digital identity verification infrastructure will streamline critical processes like customer onboarding, loan application, and processing, usual KYC/AML for account opening, and more.”