Know Your Customer (KYC), and Anti Money Laundering (AML) are the key enablers for the prevention of financial crime. In the case of KYC, currently, each institution maintains their own copy of customer data and performs verification via centralized data providers. This can be a time-consuming process and can result in delays in onboarding a new client.

Blockchain can provide a solution to this problem by securely sharing a distributed ledger between all financial institutions that contain verified and true identities of customers. This distributed ledger can only be updated by consensus between the participants thus providing transparency and auditability. This can not only reduce costs but also enable meeting regulatory and compliance requirements in a better and consistent manner.

In the case of AML, due to the immutable, shared, and transparent nature of blockchain, regulators, can easily be granted access to a private blockchain where they can fetch data for relevant regulatory reporting. This will also result in reducing complexity and costs related to the current regulatory reporting paradigm where data is fetched from various legacy and disparate systems and aggregated and formatted together for reporting purposes. Blockchain can provide a single shared view of all financial transactions in the system that are cryptographically secure, authentic, and auditable, thus reducing the costs and complexity associated with the currently employed regulatory reporting methods.