GMO Internet Launches KYC Making It Easy To Quickly Verify Identity,
The 5th Phase of GMO Blockchain Open Source Software Project:
Reduces identification costs when opening bank accounts

Tokyo, Japan – October 18, 2017 – GMO Internet (https://www.gmo.jp/en/ ), as part of the GMO Blockchain Open Source Software Project (GMO Blockchain OSS), releases programs using blockchain technology (* 1) as open source (freely available and modifiable). As the fifth phase, GMO Internet has released today open source KYC.

　KYC (Know Your Customer) is a generic term for procedures of identity verification of customers, with document requests from the bank side when opening a new account. "KYC" being released as open source herewith is a program that reduces human and financial costs of identity verification through use of the blockchain.
　GMO Blockchain OSS is currently preparing for the development of smartphone application for certification body and demonstration experiments in collaboration with GMO GlobalSign to put this mechanism into practical use.

(*1) Blockchain technology records and holds data distributed on multiple computers, and makes data fraud extremely unlikely.

【Mechanism of KYC】

　The mechanism of "KYC" takes advantage of the characteristic of the blockchain, that is, only the owner of the "key" corresponding to the address can initiate processing for that address. By recording a user's personal identity information as authenticated by a certification body on the blockchain along with the user's blockchain address (a public key, hereinafter referred to as "address"), services such as banks can easily and quickly confirm identity. Once the identity is authenticated by the certification body, it can be verified through verification of the personal information provided by users and the information recorded on the blockchain. This mechanism can be applied to a usage that requires identity verification, such as opening a bank account, creating a credit card, and trading at token exchange. It leads to a reduction in process to verify identity through sending written documents and a reduction in monetary costs.

　Personal information is not stored on the blockchain and only the hash value is recorded, so there is no risk of personal information being leaked from the blockchain.

■Identification flow by "KYC"^（*2）

Certification body's authentication of user's personal information and recording on the blockchain
1.	The user submits the "personal information" necessary for identity verification to the certification body, and signs the signature (acceptance with the "key" paired with the address) from the terminal owned by the principal.
2.	The certification body confirms the "personal information" of the user, generates "hash value of personal information,” and records it on the blockchain in association with the address of the user associated with the signature.

(1 and 2 will be done only once, whereas 3 will be done for each service registration.)

Proof of identity in services
3.	The user performs registration procedures for various services (such as opening a bank account).
4.	Various services (such as banks) generate a QR code containing the user's "registration ID" information and display it on the screen.
5.	The user reads the QR code with the user's terminal, confirms the displayed "registration ID,” agrees to the provision of the "personal information,” signs it and submits it to the service side. (Personal information registered when it was submitted to certification body is sent to the service side)
6.	Various services (banks, etc.) obtain the address of the user from the submitted signature and request "the hash value of personal information" associated with the address on the blockchain. By acquiring "hash value of personal information,” various services (banks, etc.) can confirm that the information has been authenticated by the certification body. Further, the hash value generated from the sent "personal information" is compared with the requested hash value. If they match, it can be confirmed that the application is by the user himself, and the personal identification is complete.

(*2) This is an example of operation when "KYC" is incorporated in the existing application flow. When actually doing the same operation, it is necessary to prepare an application etc. for the certification body with reference to the source of the demo app.


＜Features of KYC＞
1）KYC supports other programs offered by "GMO Blockchain OSS"
　By combining the identity confirmation mechanism based on "KYC" with various programs offered by "GMO Blockchain OSS,” it is possible to create more advanced services.
　For example, in "Token Trader" which can build exchanges of tokens, reliability can be guaranteed by incorporating the mechanism of identity verification for users participating in the transaction. Also, by combining with "Resale Dettered Ticket " which deters illegal resale and paperless tickets, we can realize tickets etc. which can be purchased only by authenticated users.

2）Easy to introduce for both certification bodies and services
　Both the certification body and various service providers do not require much time to install this program. The certification body completes installation only by incorporating the process of "confirm user's address" and "register hash value into blockchain" into an existing identity confirmation flow.
　Also, for various service providers, after incorporating "Generate and display QR code" and "Acquisition of personal information + Confirmation processing" into conventional account opening and service application processing, the program can be installed immediately.

3）It is unnecessary for the users to hold cryptocurrency (Ether)
　In the blockchain, payment of expenses by cryptocurrency (Ether) is required every time some processing (recording) is done on the blockchain. However, it is not yet common for users and merchants to own and manage cryptocurrencies.
　Since the service provider can prepay the cost of recording on the blockchain collectively in Japanese yen, the user does not need to pay each time in cryptocurrency, and can use KYC identification.

 

【Toward Practical Application】
■Development of a Authorizing Application with GMO GlobalSign
　With the aim of putting this mechanism into practical use, "GMO Blockchain OSS" is currently cooperating with GMO GlobalSign in order to develop smartphone applications for certification bodies and to build the proof of concept.
　With GMO GlobalSign's authorization from the Minister for Internal Affairs and Communications as a platform business entity (*3) for personal identification service, we provide "GMO Online Identity Confirmation Service," which enables identity verification by utilizing the electronic certificate stored in My Number card (*4).
　Based on the combined knowledge of our two companies, we aim to establish a mechanism that allows identity verification with My Number card and a smartphone application.
　We will consider applying this mechanism of personal confirmation to various processes in the days ahead, such as simplifying the opening of bank accounts and verifying identity upon selling tickets.