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Blockchain inBanking & Financewww.akeo.tech
ContentsPreface. 1Thinking of adopting blockchain in your business? .2Blockchain in Banking and Finance . 3Payments .3Reduction of Fraud .4Know Your Customer (KYC) .4Trading Platforms.4Benefits of Blockchain Technology in Banking and Finance.5Bibliography. 6Glossary. 6www.akeo.tech
PrefaceAs we believe, blockchain technology is poised to bring significant changesin the banking and finance industry. Considering the properties of blockchainbeing distributed and immutable, the technology has the capabilities todisrupt the current banking processes. Be it an exchange of values, crossborder payments, customer identification, or securing the financial data ofthe users; blockchain can bring several positive upgrades for the users.So, what problems can blockchain solve in the current scenario of the bankingand finance industry?There are several challenges that the banking and finance industry is currentlyfacing. Blockchain holds the potential to solve those challenges by reducingthe overall cost and making things more secure. Here are some of theroadblocks that blockchain as technology can solve:1.Slow transaction speed2.Risk of Frauds and Hacks3.Expensive KYC Process4.Reliance on IntermediariesContemplating the impact of blockchain on the banking and finance industry,numerous banks and financial organizations are trying to adopt the technologyto stay head-to-head with the growing market.Over the past years, blockchain has emerged as a viable technology forreplacing the current processes with new and advanced ones. In this context,blockchain enables the development of new business opportunities andeliminate existing inefficiencies. While the technology is picking up its pace, itis yet to be seen how organizations change their business models and reap itsbenefits.1www.akeo.tech
Thinking of adopting blockchain in your business?Just like any other technology that has emerged, blockchaincomes with advantages as well as disadvantages. If you arelooking for ways to adopt blockchain to your current businessmodel, it is important to consider both the advantages itoffers, as well as be aware of the disadvantages it has.Akeo AS is a Norwegian concept anddevelopment company specializingin emerging technology. Withmultiple blockchain projects in theportfolio, the team at Akeo has builtup an in-depth understanding of whatblockchain is, how it works and howto build tailored applications to meetyour business requirements.Contact us if you are interested inlearning how to leverage the benefitsof the technology.www.akeo.tech2
Blockchain inBanking and FinanceBlockchain technology has the potential to completelyrevolutionize the global financial industry by presentingnumerous opportunities to transform how people transactwith money and values.PaymentsThe world is striving towards fasteronline payments and are exploringnew dimensions of exchangingmoney. There are, however, certainbarriers that the finance industry is yetto solve. Some of the core challengesthat the banking and finance industryis facing are frauds, slow & expensivecross-border transactions, and datavulnerability.Blockchain technology has thepotential to eliminate the majorhurdles faced by banking and financeindustry regarding payments. Thedecentralized technology can assistthe current system in numerousways through its capabilities of highspeed payments, immutable ledgertechnology, and high transparency.Such implementation could alsolead to operational efficiencies andtremendous cost savings for banks.Blockchain Applicationin Payment SystemTaipei Fubon Commercial Bank inTaiwan is the first bank to implementblockchain technology in the paymentsystem for restaurants and merchants.3www.akeo.tech
Reduction of FraudBlockchain Application in KYCBanks and financial institutions usea centralized database that is moreprone to hacks and cyberattacks.Blockchain, on the other hand, is acompletely decentralized platformthat could solve the problem byoffering complete transparency inpayments and reducing frauds in thebanking and finance industry.Mastercard has recently filed a patentwhere it describes a system of usinga private or semi-private blockchainto store customer data such as name,address, and tax identification number.Blockchain Applicationin Reduction of FraudGuardtime is a blockchain backedcompany that has provided numeroussolutions in financial industry suchas detecting data poisoning andreducing fraudulence.Know Your Customer (KYC)It typically takes around 30 to 50days to complete the KYC process toa satisfactory level. Inconsistent andslow KYC systems across the globeis causing a great deal of financialburden on banks and governmentinstitutions. Apart from delays, currentKYC processes also suffers from highcosts and duplication of efforts.Blockchain technology can effortlesslysolve the issues through its attributes.Storing KYC documents on ablockchain will reduce the delaysand save money involved in theentire process. Other banks can alsouse the KYC statements stored on ablockchain without the need to askcustomers for the KYC process allover again.www.akeo.techTrading PlatformsOnline trading platforms are a greatplace for investors to trade and monitorstocks and commodities. However, theplatforms are always under the radarbecause of issues such as the risk offrauds, double spending and lack oftransparency. Additionally, the industryhas not been able to come up with apermanent solution until now.Blockchain offers a potential mediumto exchange assets eliminating theneed for intermediaries. This way itcould easily enhance the traceabilityand authenticity of the assets by storingtheir value on the permanent ledger.Blockchain Applicationin Trading PlatformsEverledger is a global startup that usesblockchain in view of reducing frauds.The organization has adopted Bitcoinas a mark of authenticity for diamondsto maintain a digital and permanentrecord of the diamond trade.ChainTrade is a blockchain basedplatform for physical trading ofcommodities. The platform is going tomove commodities and raw materialstrade to permissioned blockchains topromote fairness of transactions andsimplified trade process.4
aBenefits of Blockchain Technology in Banking and FinanceBlockchain caters to the needs of the Banking and Financesector by eliminating the need for intermediaries, enabling asignificant amount of time and money being saved.Blockchain helps in:Cheaper operational cost and enhanced capital optimization.Traceability of settlements with the help of smart contracts.Enhanced transparency within financial institutions.Eliminating chances of human error in accounting.Reduced transaction delay.5www.akeo.tech
ir-solutions/GlossaryBitcoin – A type of cryptocurrencyBlockchain – Blockchain is an immutable digital ledger that is programmed to record transactionsand anything that has a value.Data Poisoning – Data Poisoning is an attack method in which corrupt data is inserted into thedatabase.Data Vulnerability – The flaw or weakness of the system that makes the data prone to hacks andcyber-attacks.Decentralized - To transfer the control of an organization or government from a single entity toseveral smaller ones.Immutable – Unable to be changedwww.akeo.tech6
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Blockchain, on the other hand, is a completely decentralized platform that could solve the problem by offering complete transparency in payments and reducing frauds in the banking and finance industry. Reduction of Fraud Blockchain Application in Reduction of Fraud Guardtime is a bloc
