Blockchain-Enhanced CRM: Decentralized Identity and Immutable Audit Trails for High-Trust Engagements

Abstract

This paper investigates the integration of blockchain technology into traditional Customer Relationship Management (CRM) systems, emphasizing decentralized identity management and immutable audit trails to foster high-trust customer engagements. As businesses increasingly rely on digital platforms for customer interaction, concerns over data security, privacy, and compliance with regulatory standards have escalated. Conventional CRM systems, often based on centralized databases, are vulnerable to data breaches, unauthorized access, and lack transparent audit trails. Blockchain technology offers a promising solution by decentralizing customer data storage, ensuring data integrity, and enhancing the transparency of customer interactions through cryptographically verifiable records. The research explores the role of decentralized identity (DID) models in reducing fraud and streamlining Know Your Customer (KYC) and Anti-Money Laundering (AML) processes. Additionally, the paper examines how blockchain's immutable audit trails can create tamper-proof records, a critical feature for industries with stringent regulatory requirements such as healthcare and finance. The study also highlights the use of smart contracts to automate trust workflows, including loyalty rewards and service-level agreements, enhancing operational efficiency. Furthermore, governance and privacy concerns associated with blockchain integration are addressed, with a focus on privacy-preserving techniques such as zero-knowledge proofs and the use of permissioned blockchains like Hyperledger Fabric. The findings suggest that blockchain’s ability to provide secure, transparent, and automated customer interactions not only improves CRM functionality but also increases customer trust by ensuring verifiable, tamper-proof records. The research concludes that blockchain-based CRM systems are a transformative tool for organizations looking to meet regulatory demands while empowering customers with greater control over their data. Through real-world case studies and analysis, the paper demonstrates how blockchain integration can significantly enhance CRM systems, offering both practical and strategic advantages in today’s data-driven business landscape.