Tamper-Proof Customer Data Management
Sector: Tertiary sector · Industry: Banking and financial services · Organisation: KPMG / Banken-Use-Case · Maturity level: Pilot
Blockchain technology enables banks and financial service providers to store customer data as well as identity and access information in a tamper-proof, decentralized structure. This makes custody and compliance processes for crypto assets more reliable and traceable. KPMG describes this approach as a promising use of distributed ledger technology in banking.
Documentation status
- Project status: Pilot
- Evidence: Evidence high
- Editorial review: Ufuk Avci, 12 July 2026
Description
Banks and financial service providers face the challenge of managing customer data and identity information in such a way that they cannot be manipulated or altered without authorisation. Blockchain technology offers a decentralised, cryptographically secured infrastructure in which once stored data is immutable and every change can be transparently traced. KPMG describes this approach as a key component for future compliance and custody processes in dealing with digital assets and crypto assets.
In modern banking, customer data and identity information are subject to strict regulatory requirements, especially in the areas of anti-money laundering (AML), customer identification (KYC) and custody of digital assets. Distributed ledger technology (DLT) enables these data to be stored in a distributed, tamper-proof structure where no single actor can unilaterally alter entries. Every transaction or data change is cryptographically linked to the previous block, creating a seamless audit trail for internal and external auditors. KPMG and related sources point out that DLT is increasingly discussed in the financial sector as an infrastructure component for digital identities and capital markets, with legal and regulatory embedding being a central challenge. The technology is still at an early to mid maturity level in the banking sector, with initial pilot projects – especially in the area of digital securities and bonds – intended to serve as blueprints for broader institutionalisation.
Perspectives
B2B — organisations perspective
For banks and financial service providers, blockchain-based management of customer data offers a clear added value in fulfilling regulatory obligations towards supervisory authorities, as compliance evidence is automatically and immutably documented. Business partners and cooperative banks can access a shared, consistent data status, which reduces redundant identification processes and increases the efficiency of cross-border transactions.
B2C — consumers perspective
For private customers, blockchain-based management of their identity data can offer more transparency and control over who accesses their data and how it is stored. However, this added value is currently hardly noticeable for end customers, as the underlying processes run in the background of the banking infrastructure.
Employees perspective
Employees in compliance, KYC and data management departments benefit from an automated, audit-proof data basis that reduces manual checks and data maintenance efforts. At the same time, dealing with DLT-based systems requires new technical and legal knowledge, creating a need for further training and new job profiles in the area of blockchain compliance.
Benefits
General
- Tamper-proof storage of customer data through the cryptographic immutability of the blockchain.
- Seamless, automatically generated audit trail for compliance and audit processes.
- Increased transparency in the management of identity and access information for all authorised parties.
- Potential reduction of redundant data storage and manual verification steps in banking operations.
B2B — organisations
- Simplified proof to regulatory authorities through automatically documented and immutable compliance data.
- Possibility of joint, standardised identity management across multiple banks and financial institutions.
- Reduction of double checks and redundant KYC processes for shared customers.
Employees
- Relief from repetitive manual data maintenance and verification tasks through automated DLT processes.
- Clear, comprehensible data basis for compliance decisions that improves work quality.
- Emergence of new specialist fields and career opportunities in blockchain compliance and digital identities.
Challenges
General
- High implementation and operating costs, especially due to the initially necessary parallel operation of legacy systems and DLT infrastructure, as explicitly stated by KPMG.
- Complex legal frameworks, as according to KPMG Law almost all legal questions – from regulation to liability to data protection – must be clarified on a case-by-case basis for blockchain applications in finance.
- Challenge in anti-money laundering, as identifying actors behind public keys on the blockchain is difficult.
B2B — organisations
- Need for close cooperation among all market participants to develop common standards, which is coordination-intensive and time-consuming.
- Identification of suitable use cases with real added value is considered by KPMG as one of the biggest hurdles in DLT projects in the financial sector.
Employees
- Considerable need for further training, as dealing with DLT systems requires new technical and legal skills.
- Uncertainty about future role profiles in compliance departments during the transformation phase.
Technology foundation
The technological basis is a Distributed Ledger Technology (DLT) or blockchain, which, due to its decentralised and immutable data structure, is particularly well suited for securely storing customer data and identity information. The immutability of once-written blocks and the cryptographic chaining of entries ensure that data records cannot be manipulated afterwards. According to KPMG, DLT is mainly used generically in the financial sector; specific protocols for identity solutions are not explicitly named in publicly accessible sources.
Implementation examples
KPMG/KfW Maturity Level Analysis of DLT-based Capital Market
Until now, there has been no reliable analysis in the German capital market on how mature DLT-based processes for the issuance and custody of digital securities actually are and what steps are necessary for broad institutionalisation.
KPMG produced a maturity level analysis of the DLT-based capital market on behalf of KfW, published in the context of two blockchain-based digital bond issuances by KfW. DZ Bank acted as custodian, holding 100 percent of the tokens throughout the entire term in its blockchain address.
KfW issued blockchain-based digital bonds and commissioned KPMG to produce a whitepaper analysing the maturity level of the DLT-based capital market in Germany. Within this framework, the DLT infrastructure for the issuance, management, and custody of digital securities was analysed, with DZ Bank acting as custodian holding the tokenised bonds entirely in its blockchain address. KPMG identified both technical and regulatory maturity levels and outlined the prerequisites for broad institutionalisation of the DLT-based capital market. The study concludes that further pilot projects should serve as blueprints for scaling and that open questions regarding central bank money in the settlement of DLT-based transactions as well as secondary market liquidity still need to be resolved. This use case primarily concerns digital securities and capital market processes; an explicit customer data or identity component is not documented in publicly accessible sources.
The analysis addresses the lack of standardisation, the shortage of secondary market liquidity, and the unresolved issue of settling DLT-based transactions with central bank money as key hurdles for the DLT capital market.
Tags
Customer data, Blockchain, Compliance, Identity management, Crypto assets, DLT, Data security
Sources
- KPMG Deutschland – So transformiert die Blockchain das Kapitalmarktgeschäft von Banken
- KPMG Deutschland – Reifegradanalyse des DLT-basierten Kapitalmarktes
- IT-Finanzmagazin – DLT im Kapitalmarkt: KPMG- und KfW-Studie zieht Bilanz
- KPMG Deutschland – Erfolgreich ins Zeitalter der digitalen Vermögenswerte
- KPMG Schweiz – Smart Banking: die Revolution am Finanzplatz
- KPMG Law – Blockchain: Bisher noch fast alle juristischen Fragen offen
- KfW / KPMG – DLT-basierter Kapitalmarkt (Whitepaper)
- KPMG Deutschland – Digital Assets und DLT