Belgium’s Top Banks Will Share Customer Data Using Blockchain
BRUSSELS – Top-shelf Belgium banks group-up by including blockchain technology to their infrastructure in order to “simplify their customer services” according to Isabel Group’s announcement.
Among the initial participants, we can find Belfius, BNP Paribas Fortis, ING Belgium, and KBC, which are keen on using a distributed ledger to share customer’s financial data between the participant organizations in order to better understand, verify and maintain businesses’ identities and financial activity.
Fifth EU Anti-Money Laundering Directive (AMLD5) indirectly forces the sharing of personal data between Belgium based banks
According to Isabel Group’s announcement, the banking institutions will not create a chain from scratch but will instead use the existing blockchain of an application called Kube, which again, based on the financial services provider’s announcement specializes in the sector.
Furthermore, the banks involved promoted the action as a first in Europe to this effect, and their key motive was the newly introduced anti-money laundering law that has passed under the fifth AML Directive recently.
Blockchain technology would allow the cluster of banks to intercommunicate transparent data subjecting their respective customers’ financial activity, regardless of the bank utilized in each scenario.
Sure, on one hand, this would grant banks, and by extent European governments, the ability to oversee what’s really going on under each company’s hood, but at the same time, it means that in the near future it won’t really matter which bank you’re using, as more and more banks are expected to share financial data with their counterparts in a transparent fashion.
Besides tracking illegal activity such as money laundering, Isabel Group adds that such an architecture will also ensure credibility and identity verification as some companies might look legit at first sight, but then you realize they have registered different CEOs with different banks, making the company instantly suspicious.
With blockchain technology, banks could monitor key personal data such as the IDs of the chief officers, as well as those of the main shareholders in an automated procedure and on a regular basis, something that was previously done only during pre-programmed verification protocols or when requested by law enforcement agencies.
Of course, this procedure differs from bank to bank and would normally require law enforcement agencies to overcome individual bureaucratic obstacles for each bank separately, hence Kube’s app aims to automatically share, compare and verify data between banks to eliminate the time-consuming process.
Tell me his name and I’ll tell you which banks he’s using
A quick dive at the Belgium based Kube app gave me the impression that it is just a standard KYC app similar to other alternatives used by cryptocurrency exchange markets and vaults such as Coinbase to ensure all participants are who they say they are.
Registered users, and/or companies will be instantly able to open a banking account with any bank of the cluster without registering over and over again, which is kinda cool I guess, but again solved by companies such as Norbloc years before, and also any edits or changes to the data will be automatically updated in all banks simultaneously.
What’s interesting for me in this case, is the fact that while AMLD5 added blockchain-powered cryptocurrencies under the gov-level financial regulatory perspective, we’re now using blockchain technology to actually monitor traditional money laundering, well, at least in Belgium.
Remember that time when Danske Bank was caught laundering fiat worth more than the whole cryptocurrency market combined? That’s what I am saying.
Concluding, I think that this kind of banking co-ops was expected, what bothers me is that not everyone is involved in money-laundering, yet using AML as a catalyst, banking institutions can now tap to any pocket whether physical or digital, fiat or crypto, regardless of the bank you’re using.
While this is just the beginning, I see this use-case spreading like cancer among telco providers, energy provider companies and other gov-affiliated custodian agencies.
For example, if you owe a couple of bills to Vodafone, and you’re trying to open a Deutsche Telekom account, the later will know who you are and how much you owe to the previous network provider, so keep that in mind folks.
Feel free to hit me at @rosspeili or leave your comment below so we can discuss where inter-blockchain scenarios could lead in the near future.