SEDA GROUP 6

Proposed By:

Atharva Sonawane: atharva.sonawane21@vit.edu

Pragati Hiwale: pragati.hiwale21@vit.edu

Suraj Gaikwad: suraj.gaikwad21@vit.edu

Shubham Waghule: shubham.waghule21@vit.edu

KYC Verification using Blockchain

Introduction:
In the traditional KYC system, each bank will conduct its identity check i.e. each
user is checked individually by an individual organization or government structure.
Hence, there is a waste of time for checking each identity from scratch.
The blockchain architecture and the DLT allow us to collect information from
various service providers into one cryptographically secure and unchanging
database that does not need a third party to verify the authenticity of the
knowledge. It makes it possible to form a system where the user will only need to
undergo the KYC procedure once to verify his/her identity.
In order to truly understand the changes that Blcockahin can bring to the
counterproductive KYC process, it is important to understand the problem areas of
the present system. The problems will help us understand how blockchain
technology for KYC is becoming a necessity.

Vision:
Our vision is to to delve into a technology that we believe carries the key to
eliminating efficiencies and duplication in KYC processes.with the help of
blockchain, customer will register with single financial institution there by
reducing the redundancy task by avoiding the registration with multiple financial
institutions. The ultimate efficiency gain of our proposed solution is it will reduce
cost of KYC system it will provide better experience and most important it will be
less time consuming

Scope:
Facilitating near real-time data exchange. Using intra- and inter- bank verification.
Reducing processing costs substantially. The aim of our project is to remove
drawbacks or reinvent current KYC process. by using blockchain based approach
we will try to remove the presence of a single point of failure. s. We introduce a
system, based on DLT, that proposes a solution to the increased costs of the KYC
process.

Goals & Objective:

1. Redundancy: Most large files use similar data and processes to verify an
equivalent client. The solution benefit is to eliminate the redundancy
documentations that got to be verified only once before the approval information is
shared.
2. Inefficiency: Manual and time-consuming process to collect and verify
documentary evidence. The solution benefit is to extend automation where
documents and approvals are digitized and may be verified without manual
intervention.
3. Lack of specificity: Requirements for due-diligence are often fuzzy, creating
uncertainty on compliance to avoid legal sanctions.The solution benefit is to
standardize process i.e. standardized, automated KYC processes sanctioned by the
regulators.

Literature Survey:
Efforts are made to stop money laundering and frauds all around the world. As
financial service provider and corporate have to carry out extensive check in order
to meet legal compliance commonly referred as Know-your-customer(KYC).Major
weakness in the current KYC process is that data are repeatedly requested by
several institution which result in identical processes that customer go through but
produce identical results.
How can blockchain help with KYC verification?
In the future, blockchain-based KYC utilities will help bring cost savings to any
industry that relies on identity verification. This is because the technology will
allow banks and other financial organizations to rely on a more secure organized
unified model of data handling.
Distributed user data collection
A KYC utility system based on blockchain technology will enable the financial
and banking sectors to emancipate the process of identification verification.
This blockchain-based KYC system will also offer better data security by ensuring
that data access is only made after a confirmation or permission is received from
the relevant authority. This will eliminate the chance of unauthorized access and
subsequently give individuals greater control over their data.
Suspicious Activity Reporting
With a shared ledger, where numerous financial institutions are maintaining the
ledger, the process of KYC could be easily adjusted and monitored by all parties.
Any change or update to a client’s data would be available to all parties. Having
direct access to a shared ledger would help institutions save on the time-intensive
process of having to identify a scam and reporting it etc.
Functional Requirements
1.User :-customer (user) submits the required KYC
documents to the bank. bank employee will verify the documents once the
documents are verified, the verifier creates a unique ID for the user on the
blockchain.
2.Create account/ upload data on blockchain :-The verifier will generates a key
pair for the user to encrypt their personal data it will generate a QR code which
contains
i).KYC data of user
ii). unique id to upload data on blockchain
iii). public key for data encryption
3.Bank:- bank will get user id from the QR code and they will send request to the
user through the blockchain. they will generate an OTP and send to the user and
then user will decrypt his personal data stored in the encrypted format in his QR
code and send it to the Bank to validate the data by checking it with the signed
copy of this data (digital signature) stored on blockchain by the bank.
4. Smart contracts :- Smart contract is the code which is written inside the
blockchains its like a agreement between two parties The smart contracts execute
automatically when the defined conditions are met.
5 Cryptography :- Basically for data encryption and decryption we will use
cryptography concepts like asymmetric encryption, symmetric encryption
algorithm etc

Non-functional requirements:-
1 Less time consuming and reduced cost :- blockchain is less time consuming
and it also can cut costs because there is no need to repeat same process again and
again
2 Improved security and privacy :- in blockchain we get high security to our data
because it use concepts like cryptography , data encryption and decryption to
secure our data.
3 Reduced manual labour :- KYC on Blockchain eliminates paperwork
everything is in digital format.
4 Control on data :- no one can access the data even bank also without users
permission for accessing the data we need public key, users biometrics etc.
Software requirements :-
 Javascript
 Nodejs
 Ganache CLI( fast and customizable blockchain emulator),
 python for making smart contract
 Cryptography

Hardware requirements:-
 Intelcore i7
8 GB Ram
 500 GB hard drive
 Internet connection

UML Diagrams :-

Use case Diagram :-

Class Diagram :-
Sequence Diagram :-

Activity Diagram :-
Product Backlog