One of the biggest banks of India, the State Bank of India (SBI), disclosed its plans to implement Blockchain solutions in the management of Know Your Customer (KYC) protocols, among other financial processes. KYC is a collective term that refers to a number of processes employed by companies in order to confirm their clients’ true identities. KYC policies are maintained to minimize crimes such as financial fraud, money laundering, and identity theft.
The bank has collaborated with the tech giant, Intel, for the development of an enterprise solution that makes use of smart contracts to manage KYC protocols. The aim of this blockchain-based solution will be to increase efficiency of transactions for the bank while also providing security to the customers’ deals and confidential details. This joint venture makes SBI one of the growing number of financial institutions which are integrating blockchain technology into their operations to cut costs and increase overall productivity.
The aim of this effort is to enhance security within the country’s banking industry and provide a well-trusted computing system. In a press release earlier this month, Shinam Arora, the co-founder of Indian trading center Primechain Technologies, stated some major advantages of the employment of blockchain, including lower infrastructure cost and improved transparency.
He was quoted saying:
“The key benefits of blockchain technology for banks include greatly improved security, reduced infrastructure cost, greater transparency, auditability and real-time automated settlement.”
This is not the first time SBI has participated in a blockchain-related project, as the bank is a well-known supporter of this technology. Reports claim that the bank is looking to partner with other banks in order to improve efficiency of the existing banking services by creating other similar uses of blockchain. The bank was also one of the founding members of BankChain, a consortium that currently has 27 members, including Primechain Technologies The aim of this association is to explore, develop, and implement blockchain-based platforms in the banking industry.
Sudin Baraokar, Head of Innovation at State Bank of India, announced Intel as the tech advisor of BankChain. He believes that the company can facilitate Blockchain integration within India’s banking, financial services, and insurance (BFSI) industry. “Blockchain is one such technology that enables more security, and agility, but the true impact of implementing it can only be determined by an open innovation strategy,” he told Economic Times.