State Bank of India Prepares to Roll out Blockchain-Based KYC System

Following several reports that the State Bank of India (SBI) was planning to release a blockchain-based system, the bank has just confirmed the rumours, and announced their plans to launch a blockchain-based Know Your Customer (KYC) system.

With this in mind, the financial services and public sector banking company has stated that the system will roll out next month, and provide better solutions meant to respect government-issued KYC guidelines.

It is important to point out the fact that the SBI is a founding member of BankChain, which is a consortium of companies that has been formed in collaboration with Primechain Technologies. So far, the consortium has reached a total of 27 members, which are mostly banks within the Middle East and India.

Following the blockchain system announcement, Sudin Baraokar, the head of innovation at the State Bank of India has mentioned that: “By next month, we should have two beta production solutions ready for use by the 27 banks. We will also invite further participation. The beta production that will be ready are smart contracts and second is KYC.”

So far, it is believed that the SBI’s patent on ‘blockchain and smart contracts-based self-managing KYC technology’ will be used to power up the system.

Speaking about BankChain, the head of innovation also mentioned that: “BankChain is a big move. It is getting all banks together and collaborating. It is also de-risking our investment in emerging tech, so that all banks can come and invest at once... we can also share knowledge and reduce the cost. We can also use each other's technical teams to take this forward. We focused on solutions that the bank does not have... things like smart contracts, which is not regulatory heavy. We focused on those solutions.”

It also seems like the SBI is planning the use of blockchain technology for IT procurement purposes. This will lead to lower number of forms that needs signing, and decreased bureaucracy, as most of these internal processes can be done directly via blockchain technology, thus increasing efficiency.

Based on everything that has been outlined so far, it is likely that some of the other BankChain members will consider the idea of adopting similar, blockchain-based systems, in order to further automatize internal processes.