For any legitimate business to succeed in the modern world, it is important that it be up-to-date with all regulatory requirements in the jurisdiction in which it operates. Two of the most important are know-your-customer (KYC) and anti-money laundering (AML). The KYC and AML requirements for customers and the firms themselves are different from place to place but both are about to become easier thanks to Bloom’s new offering.
Bloom, a blockchain-focused solutions company for digital identity, announced on October 14, 2021, the launch of its new product, OnRamp, which is designed to aid DeFi companies with KYC & AML compliance as well as risk assessment.
Blockchain and Compliance
Bloom was first founded in 2017 and was a response to the Equifax scandal that saw the leaking of the private data of millions of American consumers. Companies need some level of user information to ensure KYC and AML compliance but this also puts this data at risk of leaks and is one of the biggest pitfalls of a centralized system.
This is the problem that Bloom is looking to solve by leveraging blockchain. Blockchain is the opposite of a centralized system in that network power is not concentrated in a single source.
OnRamp does this by creating reusable verifiable credentials (VCs) that users and firms can have access to. This works by confirming certain sensitive data and information via the blockchain without actually revealing the information. This is a win for all involved because the firms can remain KYC and AML compliant, the consumers can have their data remain safe, and the use of blockchain prevents data compromise and exploitation.
Some of OnRamp’s features include ID verification, sanction screening and PEP Screening. Other data that can be confirmed include phone numbers, email as well as social accounts.
A New Way to Assess Risk
Beyond helping with identity verification, OnRamp also offers tools to aid risk assessment with secure access to consumer financial data like bank balances and financial history. While this appears to be a more efficient system than the current credit score setup, there are plans to integrate things like credit scores and utility payment history to determine consumers’ creditworthiness.
The overall goal of Bloom is to mitigate the current issues facing both firms and their customers with regard to data exchange, which include privacy and efficiency.
“We are excited to give enterprises the ability to leverage verifiable credentials for identity verification and risk assessment, all while respecting user privacy and mitigating the risk of data leaks” said Jace Hensley, Head of Platform at Bloom.
He also spoke on the option for third party firms to access OnRamp vai WACI specification which is particularly important when there is no support for local populations in existing financial structures. Blockchain, since its inception, has prioritized financial inclusivity and Bloom’s new offering reflects this.
For DeFi companies, who are seeking new levels of growth, true KYC and AML compliance can now be achieved through OnRamp, further securing financial inclusivity for the rest of the world.