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IBM Partners KYCK! for Singapore-based Blockchain Project

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International Business Machines Corp (IBM - Free Report) recently announced a blockchain project with Singapore-based fintech startup KYCK!, which aims at smoothening the Know Your Customer (KYC) process for financial service providers.

The blockchain project is based on the open-source Hyperledger Fabric and will be supported by IBM Bluemix Garage. Notably, IBM has a Blockchain Innovation Center in Singapore, which was opened in Jul 2016.

KYCK!’s blockchain solution will have video conferencing and encrypted document submission capabilities. The platform will offer enhanced identification validation through a trusted blockchain-based business network that will potentially include banking and governmental entities.

Once the identity verification is confirmed, KYCK! will enter the customer's information into current bank-based checks or third-party KYCK! systems before account on-boarding.

Blockchain Features Driving Adoption

Lately, blockchain technology has gained significant acceptability among financial providers due to its speed and security. Blockchain is much faster than legacy technologies in completing a transaction as there is no need for manual processing or authentication by intermediaries.

Moreover, each block in a blockchain represents an electronic record that cannot be revised or tampered with once it has been included in the chain. Additionally, each block has its own timestamp and a link to an earlier block in the chain, which provides all the parties easy access to information via a secure network.

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Currently, IBM is focused on developing capabilities around the blockchain technology. It is now working with almost 300 clients including the likes of CLS and Bank of Tokyo-Mitsubishi.

Moreover, positive features of the blockchain technology have attracted IBM’s peers like Microsoft (MSFT - Free Report) , which has partnered with Bank of America (BAC - Free Report) to implement the technology in trade finance to facilitate faster, safer, cheaper and more transparent transactions.

Barclays is another banking company that has successfully tested blockchain technology in partnership with an Israel-based startup – Wave.

Recently, London-based fintech provider SETL and global auditing firm Deloitte partnered to develop a contactless card that enables retail payments to be processed and settled almost instantly by the means of blockchain technology.

IBM Cloud Solidifies Footprint

As previously noted, KYCK!’s blockchain solution will be powered by IBM Bluemix, one of the largest open, public cloud deployments in the world. Apart from blockchain, IBM Bluemix also offers cognitive computing, cloud data analytics and Internet of Things (IoT) technologies.

These (cloud, analytics, mobility and security) technologies comprise IBM’s strategic imperatives, which are its long-term growth drivers. In the recently concluded third-quarter 2016, revenues from strategic imperatives increased 16% on a year-over-year basis to $8.3 billion. Notably, cloud revenues jumped 44%.

We note that IBM continues to expand its cloud footprint by announcing new cloud centers in South Korea and Norway during the quarter. The company now has 49 cloud centers. Further, IBM’s partnership with Workday and VMware is expected to drive cloud adoption going ahead.

Zacks Rank

Currently, IBM carries a Zacks Rank #3 (Hold). VMware is a better-ranked stock carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

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