Built In Compliance
One of the most exciting features of blockchain from the compliance perspective is its practical immutability: as soon as data is saved into the chain, it cannot be changed or deleted. That is why blockchain is used as the document or proof for the transfer of any digital asset, for example bitcoins or other digital currencies. By the same token, it can be used as record of ownership of physical property – or stable coin approach, where a blockchain-powered system for registering and recording land titles is attempting to digitize real estate processes. Blockchain’s immutability also lends itself to the application of proof-of-process for compliance. Blockchain could be used to keep track of the steps required by regulation. Recording actions and their outputs immutably in a blockchain would create an audit trail for regulators to verify compliance.
Blockchain is revolutionizing our digital world and we want to transform the technology to innovation products and services for our clients.
Distributed Ledger Platform
Another regulatory field where blockchain could play an important role is in KYC (know your customer) and AML (anti-money laundering). Banks and other financial institutions have to complete many tasks and steps as a part of the onboarding process for new clients. In addition to data collection, there are important rules around validation, confirmation and verification to be completed before new clients can be onboarded. In some markets, the process can take several months. Many of the steps could be eliminated if the information existed already in a secure, tamper-resistant database – an immutable blockchain. Any changes to customer data will be distributed to participants in the blockchain immediately. The chain would provide records of procedures and compliance activities for each client. Blockchain would play the role of proof-of-process, so all that steps are easily traceable and regulators can be confident about the veracity of the information.
Is your business ready for a blockchain?
While blockchain shows promising results and returns, no system is perfect. Although blockchains are mostly secure, it is still constantly being tested for weaknesses and improved upon. Public blockchain technology is evolving faster than private blockchain technology due to a higher volume of attacks on the system, which promotes a more rapid learning curve, calibration, and improvements. And there is still much to learn about this encryption technology, both about its structure as much about its wider implications and applications.
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