I am curious to know how blockchain technology may streamline KYC and AML procedures in the trade finance sector. Can somebody provide instances or describe how this operates in the real world? Are blockchain-based systems or solutions being utilized in this industry? Any insights or information would be highly appreciated.

[Dheerav Boj]

I am curious to know how blockchain technology may streamline KYC and AML procedures in the trade finance sector. Can somebody provide instances or describe how this operates in the real world? Are blockchain-based systems or solutions being utilised in this industry? Any insights or information would be highly appreciated.

[Raabiya Issac]

The estimated annual amount of worldwide money laundering is approximately 2 trillion dollars. Terrorist financiers and criminal organizations exploit a wide range of threats and vulnerabilities within the international trade system. The colossal volume of world trade, in return, distorts transaction data. The complexities of utilizing various currency transactions and diversified trade finance structures partly contribute to these difficulties.

Numerous banks invest between $900 million and $1.3 billion yearly to strengthen and operate their AML and KYC systems. In addition to the significant expenses of KYC/AML compliance, banking institutions are under constant client demand to enable transactions efficiently. Under money laundering, digital financial crimes have also utilized modern technologies.

A blockchain-enabled AML/KYC platform can expedite AML/KYC processes by storing KYC and AML-related data and information on a distributed ledger. The information stored on a blockchain ledger is immutable and always accessible to all network participants. Consequently, handling AML/KYC data on the blockchain can assist financial institutions with data maintenance.

[Allen Paul]

Lack of openness in international trade poses a fraud risk. By offering an immutable and secure digital ledger that shares and stores customer information, blockchain technology can streamline KYC and AML processes in trade finance. This can improve productivity and decrease the need for human verification and data entry. In addition, agreements can be utilized to perform compliance checks and enforce regulatory compliance obligations. It also provides a transparent and secure method for many parties to share and access client data, thereby enhancing collaboration and lowering the risk of fraud.

Triterras’s Kratos platform, for instance, is a blockchain-based platform that enhances the dependability and transparency of global trade financing. It is an online platform built on decentralized Ethereum technology. Amazon Web Services handled Hyperledger private blockchain improves Kratos’ security by placing it behind a powerful ‘wall’ of security measures and protections provided by the industry-leading AWS infrastructure.

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