Enhancing privacy in banking systems: a blockchain-based access management and KYC solution

To have a privacy focus for one of the most prominent identity-based procedures of Know Your Customer (KYC) in the banking sector is crucial. The current study proposes a blockchain-powered middleware solution which is a secure and privacy-preserving management of Know Your Customer (KYC) data in the banking sectors. This improves data security, interoperability, and regulatory compliance in both intrabank and interbank environments. The solution uses blockchain technology for data integrity and tamper-proof records, with middleware for encrypted data storage and access control. Role-based access control (RBAC) and permissioned smart contracts come together to ensure secure data sharing among banks, regulators, and employees. The proposed solution reduces redundancy in data. Individual efforts by various banks to preserve and maintain records can also be minimized. The transaction log provided through the blockchain provides transparency and accountability. RBAC prevents access to unauthorized data. A safe and decentralized approach to KYC processes, while encouraging collaboration among financial institutions will be achieved. However, challenges in implementation could be scalability issues related to the usage of blockchain as well as reticence towards the concept of change through technology among the stakeholders of the solution.