Last year, the Central Bank of Sri Lanka said it wanted to integrate blockchain technology into the country’s banking system to improve bank security and fraud prevention. Now the central bank seems to be seeing what kind of platform could be developed shortly before the announcement .According to Sri Lanka’s central bank director D. Kumaratunge, 36 domestic and foreign companies were involved in the project:
“We invited software companies to develop a joint KYC-PoC (Know-Your-Customer) as a national project free of charge. The local and international response to project participation was extremely encouraging. We are happy to announce that we have completed the selection of suitable applicants to begin development shortly.”
How will blockchain improve funding in Sri Lanka?
KYC is a screening process in which potential customers wishing to open a bank account are subjected to a background check to determine their identity. A KYC procedure includes the verification of ID cards and documents. This includes using utility bills, checking faces and biometric data, and cross-comparing other ID documents .This requires a lot of paperwork and human labor so that the blockchain can be used to simplify the KYC processes. All information provided by potential customers is encrypted and sent to all users on the network. For KYC, the blockchain performs a system-wide check of all general ledgers when editing or changing information. This determines whether changes are legitimate and authorized. This could be used to identify potentially fraudulent activity and to enforce system requirements.