It was recently announced, in a statement made to CoinDesk, that a trio of blockchain based companies will be taking part in an upcoming pilot program together. Factom, Knabu, and IdentityMind, will each play their respective roles in the pilot, which will test the viability for blockchain as a replacement traditional banking technologies.
In this alliance, Knabu will facilitate the pilot, while records are recorded on the Factom blockchain, with IdentityMind mind performing KYC and KYB checks.
The purpose of the pilot is based upon the elimination of efficiencies inherent to the banking system’s current method of doing things. These inefficiencies arise in the various functions still reliant upon manual completion – such as client onboarding measures, like KYC checks.
Knabu CEO, Gabrielle Patrick told CoinDesk that, “…the average cost of regulatory compliance for a bank is about 30% of its budget…We’re a blockchain-first company and felt that it was necessary to demonstrate the features that can remodel that.”
UK Banking Licence
While this endeavour is simply a pilot, it sheds light upon how Knabu will approach finance if successfully approved as a licenced U.K bank.
Knabu indicates that the goal of becoming a bank stems from, what can only be interpreted as, a shunning of the blockchain and DLT sectors by traditional banks. With companies worldwide involved in these sectors often being denied financial services, Knabu believes that they not only require, but deserve, an advocate that will serve them.
In announcing the launch of this pilot program, representatives from each, Factom and Knabu, took the time to comment. The following is what each had to say on the development discussed here today.
Gabrielle Patrick, CEO of Knabu, stated,
“The purpose of the pilot is to start proving some of the efficiencies that blockchain brings – specifically as core infrastructure for a bank. The average cost of regulatory compliance for a bank is about 30 percent of its budget. We’re a blockchain-first company and felt that it was necessary to demonstrate the features that can remodel that.”
Carl DiClementi, VP of Product at Factom, stated,
“This allows us to be able to borrow the security that you get from the power of the bitcoin and ethereum blockchains to verify that your data is what you claim it to be.”
While the announcement of this pilot program is a very positive development, Factom has experienced negative news this month, as well.
Unfortunately, a large majority of the trading volume for their utility token, FCT or ‘Factoids’, took place on the popular cryptocurrency exchange, Poloniex. This is unfortunate, because it was recently announced by the exchange that they would be ‘spinning-out’ from Boston based, Circle, and that this would see the company cease offering its services for U.S. based clients. This move had a greater effect on FCT than most, as the token is listed on very few exchanges.
While this news was definitely not positive in nature, Factom remains a very interesting, and potential laden company, – as made evident through their continued relationships with government entities such as DHS, large grant programs, and now a, soon-to-be, U.K. based bank.
Operating out of London, Knabu is a blockchain company which was founded in 2017. Above all, the team at Knabu is working to develop services to help ‘bank the unbanked’.
CEO, Gabrielle Patrick, currently oversees company operations.
Founded in 2014, Factom is a ‘blockchain innovations’ company, which maintains operations in Austin, Texas. Since their inception, Factom has managed to establish themselves as an industry fixture. This has been achieved through various impressive achievements over the years, which include partnerships with, not only government entities, but large private companies. Their efforts have also resulted in them being the recipients of high-profile grants, such as that from the Bill and Melinda Gates Foundation.
CEO, Paul Snow, currently oversees company operations.
Based in Palo Alto, California, IdentityMind was founded in 2013. Above all, the company works towards developing, and providing, services aimed towards the prevention of fraud and nefarious activity.
CEO, Garrett Gafke, currently oversees company operations.