As the week progressed, more and more good news kept floating around the cryptocurrency arena. It started with the powerful families of Rockefeller and Rothschild taking an interest in this arena, then the hour of miracles, Ripple breaking the $0.5 mark and so much more. After two months of seeing red on the charts it is time the cryptocurrency field moves towards a bull run. Civic (CVC) is definitely one of these tokens to watch at the moment as it saw its price rise by over 50% since the week began to close at $0.308.
Civic platform allows its users to store identities on an immutable and secure blockchain platform to wipe out all identity related crimes and disputes. Governments today still have cases rising from identity theft, identity fraud, credit/debit card theft etc. This has caused increasing regulations on companies to implement Know-Your-Customer (KYC) protocols in their systems. The law is even stricter on financial firms as the report stated.
“KYC continues to weigh heavily on financial institutions, with the report citing that a lack of appropriately skilled people is their biggest concern and half of all respondents stated that the number of employees working on KYC had increased over the past year.”
-Thomas Reuters report, 2016
In a report, Thomas Reuters found out that the average financial firm uses about $60 million annually on KYC procedures while the amount could grow up to $500 million for some of the large financial firms. This cost and complexity of the procedures of KYC is reported to be increasing. The latest official report is yet to be released but with these kind of numbers, it is clear that the companies are staining to comply with the obligation.
Since the report, assuming no inflation on the cost of these procedures, an average financial firm has spent over $100 million on these procedures. Some have spent close to $1 billion USD. The companies also find it difficult to entice customers to register with all these lengthened procedures. This discourages most to even register to some of these financial firms. In conclusion, the procedure is expensive and at times costs the financial firms more than what they could have used without the KYC procedure.
Is it really worth it?
While the idea behind the KYC procedures are helpful they really are not as secure as they should be. This is clear in the continuing theft and fraud in the current system, a change would be good for everyone in my opinion.
3 Solutions to the $500 million KYC problem
As I highlighted in an article before, Civic (CVC) has great potential for developed and especially developing governments and economies to prevent identity crimes. How exactly does Civic blockchain plan to solve this problem?
- Civic is cheap
The ERC20 token presents cheaper alternative to collecting data and identities to existing systems. The systems can be easily integrated in financial companies given the decentralized nature. This reduces the cost of storing identities in centralized authorities. The current cost of a CVC token is around $0.3 and is the token used as gas on the network. At the current rate it still seems underpriced at the moment given the potential of the civic platform.
- The identities are stored in a decentralized Civic blockchain
This is the competitive advantage that Civic holds above the current systems. The customers’ information is collected in a decentralized way and stored on an immutable blockchain. Storing identities on the blockchain completely eradicates the possibility of an identity hack or any kind of identity crime. This is due to the immutable nature of Civic blockchain
- Civic Network
- Compare to current systems,Civic (CVC) is considerably fast and very secure in obtaining identity since the record in the system is already timestamped with a unique cryptographic signature.
- Civic also does not require a different identity login to all the financial firms’ one is joining as all your information is already online reducing the cost considerably.