Blockchain is touted to be the next revolution in the tech industry. According to a report titled: “Blockchain Distributed Ledger Market by Type and End User: Global Opportunity Analysis and Industry Forecast, 2017-2023″ published by Allied market research, a research agency based in Portland, the global blockchain distributed market ledger accounts are expected to account for $5,430 million by 2023, growing at a CAGR of 57.6% from 2017 to 2023. The following info-graphic explains predicted life cycle of a blockchain strategy, if the world adopts and implements it over a span of 10 years.
Blockchain, simply put, will reduce the need for intermediaries which will intern reduce transaction costs considerably. It will mitigate the risk of fraud and identity theft while transacting.
Benefits of Blockchain in Compliance
Organizations that comply to regulations of any kind usually need to submit a document as proof of their compliance. Blockchain not only ensures secure submission but also saves the document into the chain. Therefore, this technology is especially useful while transferring digital assets. The proof of transfer cannot be changed or deleted in a blockchain. Because of heavy regulation in India, especially with GST underway, blockchain would be a welcome change. Organizations can use this to track and record actions. Thus, this in turn will ease regulatory authorities to carry out an audit process and verify compliance. This would provide the regulatory authority real-time and non-editable access to an organization’s documents. Further, it will help in reducing the dependence, cost and energy spent on preparing detailed regulatory reports and will instead direct their resources and efforts towards core business processes.
The technology will enable the HR department of organisations to acquire accurate information regarding contractors and partners. Moreover, the storage and management of information is on a safe and distributable database. Any third party cannot tamper with the uploaded information.
Blockchain highlights the company’s unaccounted transactions. It showcases the transactions which are hidden from the public- A case of fraud/window dressing. Because, blockchain does not only show historical records, but also edits made to the information. Hence, this process will further strengthen transparency in operations.
It helps the cause of anti-money laundering regulations and KYC norms. Organizations like banks and financial institutions are accountable for the data collection, confirmation and verification of such data. Such an immutable blockchain can be a source for all compliance activity that the customer has to perform.
Though, there are some challenges that authorities may face – the problem of slow performance as compared to conventional databases and the problem of implementing new infrastructure that will enable and support such highly calculation intensive technology.
The info-graphic shows the uses of a distributable ledger . Financial companies use it for digital transfer of assets and also for other purposes like inter-bank payments, transferring loyalty points to airline customers, stock trading mechanism, land registry etc.
Blockchain can help embed integrity and ethical practices into the fabric of the GRC industry. Governance would be more effective and efficient,regulatory authorities would be able to monitor the system. As a consequence, stakeholder confidence will strengthen.Add to favorites