In order to check regulatory risks, money laundering, unauthorized financing, and so on, banks are spending billions of dollars in order to onboard new customers and maintain compliance for existing customers. Although opening accounts is a simple, straightforward process, it involves regulatory processes to identify and further verify the applicant. These processes are known as on-boarding processes, also known as know your customer (KYC). This process faces constant regulatory changes and needs to be up to date to meet compliance. It is complex, time-consuming, and costly. Roughly, each bank spends 60 to 300 million dollars annually. It takes approximately 5 to 45 days per KYC and, on average, it takes 24 days for a new account to be on-boarded. Along with that, financial institutions need to maintain their systems and processes to remain compliant with changing regulatory requirements. In addition, a customer doesn't have a unified experience because it changes from bank to bank. On top of this, banks collectively spend billions of dollars on AML yearly.

It is evident that the burden in all financial institutions and banks results in poor client on-boarding. Blockchain is a potential savior in this case because it allows financial institutions to share the burden. Also, it removes the duplication of efforts since customer details will be available at the shared distributed ledger. With blockchain-enabled KYC processes, a customer's most recent information is available on the shared distributed ledger. Participating financial institutions and banks will reach a consensus if changes need to be made to the customer data, and they will participate in a joint consensus-based approach to verify applicants.

Currently, KYC/on-boarding involves document collection from the applicant, engaging credit agencies to verify an applicant's identity, and its inclusion into AML and illegal financial transactions. This chain involves multiple parties and it's costly, time-consuming, slow, and error-prone.