Economy

SBI’s Blockchain Based KYC to Begin New Era of Digital Banking in India

SBI's Blockchain Based KYC to Begin New Era of Digital Banking in India

Technology runs through our veins. Be it use of smartphone, smart TV or smart locks, we all are grappled in the world of technology. The digitization push of Modi government has proven that the technology will enable true financial empowerment. Government is also brainstorming on the usage of blockchain technology. Stemming from this thought, the largest lender bank of India State Bank has decided to be a part of blockchain based Bank Chain community.

What is a Bank chain community?

Bank Chain is a next generation platform that aims at streamlining the cost post-trade process, unlock more savings and increase operational efficiency without compromising on the security. This community includes 27 more banks including SBI, ICICI, DCB Bank, Kotak Mahindra Bank, federal bank, Deutsche bank, to name a few.

SBI will partner with Intel and Prime Chain technologies, a Pune based firm that specializes in offering block chain technology. It will implement this technology to manage KYC details in the system.

Why State Bank of India has become a part of this community?

Recently, a news byte has confirmed that State Bank of India will start integrating block chain technology in the products offered by them as a part of a beta test. The company will soon roll out a block chain enabled smart contracts. These applications are still in a nascent stage and will give a boost to profitability, if leveraged well.

‘Smart contracts’ are just normal contracts which use a decentralised and distributed ledger. The agreements and code are public, hence, traceable and irreversible. According to a report, the company will rollout blockchain-enabled KYC – Know Your Customer.

What are the benefits offered by the Blockchain technology?

This technology will offer a lot of benefits to the bank, like the smart contracts can be substituted for signing forms, reduction of IT procurement, easy KYC process, peer to peer payments, loan syndication and much more. Earlier the use of this technology was limited to the crypto-currencies, but now this technology will be used to maintain the data across different verticals( agriculture, loan disbursal, energy, KYC) in an optimum way. Another benefit of this technology is SBI can leverage the knowledge and technical expertise of other banks too.

The bank is also in a phase to set up a new innovation center in Navi Mumbai which will focus on emerging technologies like Artificial Intelligence, Robotic Process Automation, Machine Learning, and Predictive Analysis that can ease out different processes.

Conclusion

This move definitely makes us believe that the future is digital. But what do you think will automation reduce the operational costs and henceforth the NPA? Well, it will be decided in future but this move of SBI newly elected chairman Rajnish Kumar is truly noteworthy.

3 Comments

3 Comments

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