The Use Case
The process of KYC is an onerous one for both financial institutions and their investors. For exxample, when investing in two different funds, there is an obligation to provide what is in most cases the same information. This duplication is a major pain point for all stakeholders.
A blockchain solution would provide a platform which stores all information relating to an investor. The information would be encrypted and immutable. There is also the oppotunity to involve trusted third parties (e.g. passport office) to validate KYC information, making it a more realistic offering. This will aid in reducing duplication and in preventing fraud.
How It Could Work
James is invested in Fund A, and is keen to further diversify his portfolio. When contracting his broker, he is requested to provide all the same documents again James is unhappy with his exxperience, and is unsure whhy he needs to provide the same documents twice.
A blockchain solution would allow James to store his data in a secure, immutable place, which he can permission parties to access when he wants to invest. There is a further added value for James because there is the potential for him to share his validated information with other financial services insitutions, for exxample his bank.