Russia’s Alfa Bank JSC has taken part in a successful test of an innovative international blockchain platform aimed to facilitate the global exchange of data on corporate customers, the bank said in a press release on Wednesday. The new service is based on Corda platform, an open source blockchain project designed for businesses, according to the bank, which is one of the largest private financial institutions in the country and the only Russian bank with R3 Consortium membership.
The solution will allow exchanging client database between the R3 Consortium members worldwide as part of a Know Your Customer (KYC) user identification system. Hence, all financial institutions with R3 membership will gain shared access to the corporate accounts data, which is required to implement KYC procedures.
Meeting this regulatory demand has become essential to banks, since the KYC policy helps to improve financial transactions transparency and prevent fraud and money laundering.
However, at the moment such data is scattered, and various banks have to check the same data multiple times, while customers have to repeatedly submit the same information to different financial institutions. With the new blockchain-based service, all the available data will be aggregated as a single database, which can lower banks’ operating costs and speed up financial transactions.
The testing has been performed by about 40 of R3 Consortium members, including banks and regulatory bodies, such as BNP Paribas, Deutsche Bank, UBS, Societe Generale, ING as well as Central Banks of Peru and Columbia. Alfa Bank was the only participant from Russia in this international project.
During the four-day test, its participants conducted more than 300 transactions in 19 countries, with banks seeking access to corporate accounts data and customers modifying their data in order to check whether it is updated efficiently for all participating banks.
As Dmitry Oustinsky, the Head of International Compliance at Alfa Bank, commented, this experience with R3 is essential for enhancing KYC procedures implementation within the national legal framework. Besides, the project is a good example of Russia’s successful integration into global technology trends, he added.
R3 Blockchain Consortium was founded in 2015 by a number of global major financial institutions, including Barclays, Commonwealth Bank of Australia, Credit Suisse, JP Morgan, and Goldman Sachs, in order to promote blockchain technology development worldwide. Alfa-Bank became its member in April 2018.