ENHANCING KYC VERIFICATION FOR

EFFECTIVE ANTI-MONEY LAUNDERING

THROUGH THE USE OF BLOCKCHAIN TECHNOLOGY
INTRODUCTION
• Suggest a novel way to KYC verification.
• A Distributed ledger technology based
system solution to the growing expenses
of the KYC lack of consumer satisfaction.
• The traditional KYC is manual,
time-consuming and is duplicated across
institutions.
• Blockchain-based methods eliminate
these shortcomings.
• One-time KYC through blockchain network.
 WHAT IS KYC?
• KYC required validating the client's
identity when creating an account.
• Customer fails to fulfill terminate a
business relationship.
• Such as ID card verification, face
verification, document verification
(such as utility bills as evidence of
address), and biometric verification
are all part of the KYC procedure.
• Banks are responsible for KYC
compliance.
 DISTRIBUTIVE LEDGER TECHNOLOGY
• There is no central server or authority administering the database
in this technology, which makes the system transparent in the
event of distributed networks since there is no chance of a single
point of failure
• Because of the decentralized nature, confidence among
participating nodes grows.
• Since various forms of consensus procedures may be utilized to
make distributed ledger technology more reliable, quick, and
updated, it is more scalable.
ANALYSING KYC VIA BLOCKCHAIN
• Customer contacts Bank A will
complete the primary KYC
verification.
• Saved as digitally signed papers A’
s smart contract.
• If the customer wishes to work with
another bank, say Bank B, he just
provides the address of his original
smart contract, Bank A’ s
verification result.
• Verification report from Bank B saved
in the customer’ s smart contract.
 PYTHON PROGRAM TO CREATE BLOCKCHAIN
import hashlib
from time import time
from pprint import pprint

class blockchain():
def __init__(self):
self.blocks = []
self.__secret = ''
self.__difficulty = 4
# guessing the nonce
i =0
secret_string = '/*SECRET*/'
while True:
_hash = hashlib.sha256(str(secret_string+str(i)).encode('utf-8')).hexdigest()
if(_hash[:self.__difficulty] == '0'*self.__difficulty):
self.__secret = _hash
break
i+=1
def create_block(self, sender:str, information:str):
block = {
'index': len(self.blocks),
'sender': sender,
'timestamp': time(),
'info': information
}
if(block['index'] == 0): block['previous_hash'] = self.__secret # for genesis block
else: block['previous_hash'] = self.blocks[-1]['hash']
# guessing the nonce
i =0
while True:
block['nonce'] = i
_hash = hashlib.sha256(str(block).encode('utf-8')).hexdigest()
if(_hash[:self.__difficulty] == '0'*self.__difficulty):
block['hash'] = _hash
break
i+=1
self.blocks.append(block)
def validate_blockchain(self):
valid = True
n = len(self.blocks)-1
i =0
while(i<n):
if(self.blocks[i]['hash'] != self.blocks[i+1]['previous_hash']):
valid = False
break
i+=1
if valid: print('The blockchain is valid...')
else: print('The blockchain is not valid...')
def show_blockchain(self):
for block in self.blocks:
pprint(block)
print()

b = blockchain()
b.create_block('Ram', 'Python is the best programming language!!')
b.create_block('Vishnu', 'I love cybersecurity')
b.create_block('Sanjay', 'AI is the future')
b.show_blockchain()
b.validate_blockchain()
OUTPUT
 DETERMINATIONS
• Reinvent the existing KYC procedure.
• Addresses the issue of redundancy and inefficiency, significantly
cutting the system’ s operational expenses.
• We also eliminate the presence of a single point of failure.
• Verification ensures faster access to the KYC document while
also providing security.
• The smart contracts are owned by the clients.
 CONCLUSION
• The future of every industry
lies in total digital
transformation.

• The lower regulatory

expenses of KYC would
lower the barrier to running
a financial institution open
up the financial sector to
more competitors.

• This Technology will

prevent from money
laundering