Compliance efforts are a tall task for many financial services and other organizations worldwide. New regulatory requirements are leading to greater demands to collect relevant client information before establishing a business relationship.
KYC (Know Your Customer), AML (Anti-Money Laundering), CTF (Counter-Terrorism Financing) and other labor intensive activities can have a chilling effect on business productivity and exact a huge cost. This is the result of voluminous amounts of customer data needing to be manually checked for accuracy, completeness, and duplications to ensure that targeted requirements are met.
Customer losses leading to a decline in revenue can result if these data gathering, onboarding, and client-lifecycle activities are inefficiently handled. An example of this is in the financial services industry where a customer may drop a banking relationship due to a lengthy credit decision process and more rapid competitor response. Moreover, slow manual processes have become prime targets for increased regulatory scrutiny and inspections, resulting in fines and even jail time for business leaders.
The need for advanced automation and real-time customer setup solutions has never been greater. One of the solutions being advanced are cost-effective, automated blockchain solutions for meeting regulatory demands tied with KYC, AML, and CTF. An emerging startup player in this space is the Ireland-based firm, Kyckr.
Taming the Compliance Jungle
Kyckr is a blockchain-centric solutions provider that delivers end-to-end compliance data sourced from over 150 business registers worldwide. Information captured and disseminated through the use of Kyckr’s verification API is used by banks, financial institutions, payment solutions providers, accounting and law firms and other organizations to meet regulatory requirements, all with the goal of preventing criminal activities such as money laundering, terrorism, and fraud.
Kyckr’s beginning and evolution has been an interesting one. Rob Leslie, company founder and brainchild, spent his early career living in Japan working as an electronics engineer. After nearly 20 years, he returned to Ireland and was introduced to Ben Cronin, his eventual Kyckr co-founder.
During a coffee shop meeting in early 2007, Cronin mentioned an opportunity for the commercialization of compliance data via European Business Registers. Leslie thought it looked like an interesting idea, so they started a new initiative in March 2007, just as regulation was starting to drive changes. Their first sale was in December 2008, with data being delivered from 12 European registers. They now deliver data from over 155 registers around the world via their web portal and API.
Recently Kyckr announced a new, collaborative effort for its corporate identity blockchain service with Credits, a platform that provides distributed ledger technology software and cloud-based services. This move signals Kyckr’s commercial readiness to deliver an automated alternative to the prevailing model for capturing and employing compliance information. The goal of this partnership is to become the best-in-class service for verified, secure and trusted corporate identity — a single source of truth.
Speaking with Bitcoin Magazine, Leslie described the current AML and KYC environments as complex and hard. “As Kyckr grows, we are seeing how we can apply automation to solving lots of tasks that are currently manual. This allows banks and other organizations to put their staff to work on the complex cases, instead of the vast majority of organizations, which are straightforward in their process.”
He says that Kyckr has always held the view that to do KYC properly, information must be gathered from the authoritative source, which is the business register. “Nothing else should ever be accepted, as the provenance and veracity of the data cannot be guaranteed.”
Over the course of its evolution, Kyckr has also discovered that identity information, whether it be personal or corporate, does not naturally exist in aggregated databases. Rather it is stored in disparate places, requiring API connections to build complete identity profiles from primary sources.
Kyckr’s just-in-time element is likely to be viewed as its prized value proposition. Says Leslie: “We believe that real-time monitoring is needed to allow compliance to be maintained in real-time. Also, we think governments need to do more, as they have a duty to provide the means for identity to be verified, efficiently and quickly. To date, they have not done this well. Kyckr is aiming at making organizational access to the data easier in order to make the compliance process more efficient, faster and better for everyone.”
Leslie believes that Kyckr’s corporate identity blockchain will get a lot of attention as there is an increasing awareness of identity information serving as the root of everything. “This verification process must be digital, secure, trusted and fast. We will be looking at how we can support the rapid growth that is happening in this space when it comes to delivering digital trust by ensuring the availability of a solid trust anchor.”