Reliable Blockchain-Based KYC Model for Blacklist Records in Insurance

Know Your Customer (KYC), which is primarily utilized by banks in the financial system, improves financial organizations' processes. The information received from the customer throughout the KYC process can be utilized to prevent fraud, money laundering, and other illegal acts. KYC processes can be carried either by individual financial institutions or through a centralized system. Aside from both of these possibilities, it is also possible to conduct KYC processes using a blockchain-based system. In this study, insurance fraud records, which insurance companies call blacklists, are carried out with blockchain technology. The solution prepared on the Ethereum network allows different insurance companies to access the network and read and write blacklist records. Keeping a blacklist record, which can be associated as a KYC process, reveals a fast, unchangeable and transparent structure between insurance companies. The study also addresses methods to mitigate a critical vulnerability in these networks where a single actor can manipulate the system through fake identities. This situation is considered as a Sybil attack. The closing remarks underlines the eagerness of emerging regulations and standards for privacy, access control, data sharing, scalability, etc.