It is particularly difficult when registering for a financial service, including a bank account or a bitcoin exchange account. In order to conform to KYC and Anti-Money Laundering (AML) legislation, these services often need a user to submit electronic confidential personal papers for validation.
A user will be required to submit such paperwork for each account of this kind that they establish. Under the newly announced IOTA Identity, the IOTA Foundation has been developing a mechanism referred to as the Identity Actor.
The Identity Actor is defined as a program that can interact via messages and responses linked to Self Identity (SSI) and database administration, according to the IOTA blog.
This implies that the IOTA Foundation is developing software that can “speak identity” with rest of the Identity Actors. The demonstration of the technology aims to demonstrate how SSI may be utilized to build a secure and reusable KYC that complies with the General Data Protection Regulation (GDPR).
The Selv app’s presentation enables users to establish a distinct ID and perform a random KYC. The KYC is then saved as a Verifiable Credential on the app. The user can then utilize their KYC credential in the Selv app’s simulated setting to accomplish tasks such as registering a new firm, opening a bank account, or even purchasing liability insurance.
It removes the requirement to input the necessary information and submit documents for each of those procedures. Instead, individuals must only disclose their Decentralized Identifiers (DIDs) and demonstrate possession of them.
Along with the requirement for improved KYC verification, governments have also called for improved user data management. As a consequence, businesses are hesitant to store customer info if they cannot ensure its safety.
The IOTA Foundation, via its SSI initiatives, and particularly the newest Selv demo, aims to make financial organizations more compliant with legislation while providing customers control over their info and the manner in which it managed.
Michiel Sollet, Innovation Manager of de Volksbank, shared his thoughts:
“The most significant advantage of Decentralized Identity technology is that it effectively places ownership of personal information in the arms of the owner: the consumer. A decentralized environment will render the KYC process easier for both banks and consumers. As a bank that adjusts to its clients’ demands instead of the other way around, de Volksbank sees tremendous potential in DID to further progress its goal to provide financial services based on the shared value concept. This implies that all four of our stakeholders — consumers, society, workers, and shareholders – must get equal additional value.”