KYC processes can be hard. The traditional way of proving a person lives where they claim to live by having them produce a paper utility bill or bank statement is unreliable, easy to fake, almost impossible to verify and a real hassle for the customer. Sedicii, in collaboration with ESB Networks, has solved this problem. Using cutting-edge cryptography called Zero Knowledge Proof (ZKP) technology, the new, fully digital service enables financial institutions to verify customer name and address information digitally, directly with an authority without any personal data exchange, ensuring full compliance with privacy regulations like GDPR.
“We can now independently verify with an authority that a person really lives where they claim to live. This makes KYC processes simpler and more accurate.” – Rob Leslie, CEO Sedicii
The Challenge
Financial institutions face increasing pressure to streamline Know Your Customer (KYC) processes while adhering to strict data protection regulations. Traditional verification methods often involve sharing sensitive customer information, exposing institutions to data breaches and non-compliance risks.
For ESB Networks, the challenge was twofold:
- Privacy Compliance: As a regulated utility, ESB needed to ensure that customer data was never exposed or shared during the verification process.
- Stakeholder Alignment: Successfully implementing the solution required collaboration across multiple internal teams (legal, regulatory, data protection) and external stakeholders like the Data Protection Commission (DPC).
The Solution
Sedicii’s Zero Knowledge Proof (ZKP) technology addressed these challenges by enabling secure, privacy-preserving verification. The system transforms customer data into encoded patterns akin to a “digital Rubik’s Cube.” Using advanced cryptographic algorithms, the solution verifies that data provided by a customer matches ESB’s records without revealing any underlying information.
Key features of the solution include:
- Privacy by Design: Ensures no sensitive data is transmitted, stored, or exposed during the verification process.
- Collaboration at Scale: Involves multiple teams working together to meet technical, legal, and regulatory requirements.
- Customer-Centric Approach: Creates a frictionless digital experience, eliminating the need for paper-based verification like utility bills.
Implementation Journey
The journey from concept to implementation was a complex yet rewarding process:
- Building the Business Case: ESB identified its authoritative address data as a unique asset for addressing market needs in the financial sector.
- Collaborative Development: Sedicii and ESB worked closely with internal teams and external regulators to design a compliant, customer-centric solution.
- De-Risking Through Pilots: Three pilot projects were conducted to demonstrate technical feasibility, address regulatory concerns, and validate customer demand.
- Regulatory Approval: Open and transparent communication with the DPC and Commission for the Regulation of Utilities (CRU) was critical to securing approvals.
- Executive Buy-In: Support from ESB’s executive team ensured the alignment of resources and strategic priorities.
Results
The Name & Address Verification solution is now live and available to financial institutions across Ireland and the world. Key outcomes include:
- Enhanced Privacy: Data remains fully protected, ensuring compliance with GDPR and other regulations.
- Frictionless Customer Experience: Eliminates the hassle of submitting paper documents like utility bills for address verification.
- Scalable Solution: Ready for adoption by banks, credit unions, and other financial institutions seeking secure, efficient KYC processes.
“This solution ticked all the boxes from GDPR point of view and also from a regulator point of view” – Ratna Nelapati, Innovation Manager, ESB Networks
Real-World Applications
The solution assists in the prevention of frauds, such as push payment scams, where criminals manipulate payment information to redirect funds to accounts they control. For instance, it ensures that a recipient’s name matches the intended sender’s records, safeguarding transactions.
Lessons Learned
This project underscored that technological innovation alone is not enough; successful implementation requires an “all-of-organisation” approach. Collaboration among legal, regulatory, IT, and executive teams, as well as open engagement with external stakeholders, was essential.
Future Potential
The ESB Address Verification solution sets a precedent for how utilities can leverage their data assets to deliver innovative services beyond their traditional scope. Future enhancements may include automatic address updates with customer consent and expanded use cases in sectors like telecommunications and government services.
Conclusion
The partnership between Sedicii and ESB Networks exemplifies the power of collaboration and innovation. By combining advanced cryptographic technology with ESB’s authoritative data, they have created a solution that not only enhances privacy but also delivers significant value to customers and financial institutions.
If you’re interested in learning more or adopting this service for your organisation, please contact Sedicii today.
Watch the Webinar
Learn more about this innovative collaboration in our webinar: https://sedicii.com/news/webinar-from-zero-to-hero-a-privacy-story/
This article is part of Sedicii’s ongoing thought leadership in support of Project PHACKS, an initiative focused on building collaborative communities to address complex cybersecurity and data privacy challenges. PHACKS is funded by the European Union and brings together organisations to explore new approaches to secure data collaboration utilising privacy enhancing technologies. Through this work, Sedicii contributes its expertise in advanced cryptography, secure data collaboration and digital identity to promote safer, more transparent digital ecosystems across Europe. The views expressed herein reflect the author’s perspective and do not necessarily represent those of the European Union. Learn more about Project PHACKS.