In a world that is more digitally connected than ever before, businesses often need to know who they are serving and what their needs are. There is also the matter of security, which more enterprises are considering. While this should be a straightforward issue of know-your-customer (KYC) requirements, more of these customers are prioritizing their privacy.
After scandals like Cambridge Analytica and the growing concern about how their data is used, both sides of the equation are having to come to a compromise and leverage innovative technologies.
Take iGaming and gaming, which have increasingly turned to technologies like blockchain to address these issues. Blockchain is more widely used these days, whether it’s through crypto or the networks themselves. These have, in turn, had an impact on the gaming sector.
We have seen the rise of blockchain-powered platforms that try to skip the KYC process altogether, requiring only an email address to register, if that. In such cases, customers only need to connect their crypto wallets to these platforms and eventually play anonymously. As Kane Pepi writes, many consumers are looking to play at no-KYC gaming platforms today to preserve their privacy and sense of control.
This has revolutionized the gaming space and also coincides with the rise of crypto on the global stage.
Another sector taking a similar path is that of banking in decentralized finance. Perhaps one of the most KYC-heavy industries in the world, banks find themselves interacting with more institutions than ever before. From insurance companies to booking sites for travel, customer information is being shared far and wide, posing unique challenges for all stakeholders. These issues, however, are being addressed thanks to the magic of zero-knowledge proofs. This technology essentially helps one institution confirm certain information without having to reveal it or by partially obscuring it. Say a customer wants to apply for a line of credit and their banking history needs to be assessed. Usually, they would have to grant access to this sensitive history. But with zero-knowledge proofs, the bank can confirm that the customer has above a certain amount of income without revealing the final number.
This offers the best of both worlds as the customer can access the services that they need, the banks can aid them in doing this, and the third-party institution gets confirmation of the data they require. With zero-knowledge proofs solving such an age-old problem, it is no surprise that it is so popular.
eCommerce is also having to navigate KYC and what it means for the modern consumer. We have more choices than ever before and various businesses are having to deliver the best, most curated experience ever, and much of this leverages KYC data. The good news is that many are succeeding at this task thanks to AI and other tools. By analyzing consumer behavior across sites, eCommerce businesses can determine what products and services will most appeal to customers and how best to present these to them.
We can see it in everything from our Amazon feeds to our Netflix-recommended content. Ultimately, getting KYC data is not the end of the challenge; using it in a way that benefits both the buyer and seller is. As AI programs continue to expand their capabilities to the KYC niche, we’ll see this leveraging of customer data in businesses we could not even imagine. The result will be a more robust and competitive market where customers can have their needs met.
KYC has been a consistent challenge for businesses for years. However, several industries are leveraging all sorts of digital tools to overcome them and thrive.
