Various industry verticals have begun to leverage blockchain technology. Sectors such as rental real estate, education, trade, and entertainment services are among the early adopters of this technology. However, the financial sector remains as the most affected sector of all. In this article, we’ll explain the answer to the question what is KYC?
We’ll also discuss how blockchain technology is helping the customer onboarding and KYC verification process in fintech projects. But first, let’s identify why there is such interest in KYC with blockchain in the UK financial sector.
What brings Blockchain into the UK’s Financial Industry?
It is true that blockchain technology got famous with their implementation in crypto projects. But, if we put aside the cryptocurrencies, what triggers the rest of the finance industry to adopt blockchain technology?
The trend of blockchain adoption in the financial sector has boomed due to the implementation of Fifth Anti Money Laundering Directive (AMLD5) by the European Union on 10th January. It stipulates that now the regulators will require very detailed information related to financial transactions of the participants, and that they will also need to verify those transaction details.
Other than the UK market, especially in the G7 (Group of Seven) countries, the Financial Action Task Force on Money Laundering (FATF) have been in force with a similar line of regulation since 21st June, 2019. These regulations have become norms or even unuttered requirements for the global financial sector.