Designing a Framework for Digital KYC Processes Built on Blockchain-Based Self-Sovereign Identity

•SSI can make KYC processes completely digital, efficient, compliant, and convenient.•No personal data need to be stored on a blockchain.•SSI inhibits data silos, lock-in effects, and aggregation of market power.•Blockchains role for SSI should be more restricted than is often proposed. [Display omi...

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Bibliographic Details
Published in:Information & management 2022-11, Vol.59 (7), p.103553, Article 103553
Main Authors: Schlatt, Vincent, Sedlmeir, Johannes, Feulner, Simon, Urbach, Nils
Format: Article
Language:English
Subjects:
Banking
Decentralized identity
Digital certificate
Digital wallet
Distributed ledger technology
Verifiable credential
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Summary:•SSI can make KYC processes completely digital, efficient, compliant, and convenient.•No personal data need to be stored on a blockchain.•SSI inhibits data silos, lock-in effects, and aggregation of market power.•Blockchains role for SSI should be more restricted than is often proposed. [Display omitted] Know your customer (KYC) processes place a great burden on banks, because they are costly, inefficient, and inconvenient for customers. While blockchain technology is often mentioned as a potential solution, it is not clear how to use the technology’s advantages without violating data protection regulations and customer privacy. We demonstrate how blockchain-based self-sovereign identity (SSI) can solve the challenges of KYC. We follow a rigorous design science research approach to create a framework that utilizes SSI in the KYC process, deriving nascent design principles that theorize on blockchain’s role for SSI.
ISSN:0378-7206
1872-7530
DOI:10.1016/j.im.2021.103553