Fraud Reduction 45% of financial intermediaries such as stock exchanges and money transfer services suffer from economic crime every year.Most banking systems around the world are built on a centralized database that is more vulnerable to cyberattack because it has one point of failure rather than many—once hackers breach the one system they have full access. Know your Customer (KYC)Financial institutions spend anywhere from $60 million up to $500 million per year to keep up with Know your Customer (KYC) and customer due diligence regulations according to a Thomson Reuters Survey.Blockchain would allow the independent verification of one client by one organization to be accessed by other organizations so the KYC process wouldn’t have to start over again.By storing data in blocks and using a tamperproof hash format, banks can improve the security of the stored identity, improve portability of data and reduce the time taken for KYC efforts.Smart ContractsBecause blockchains can store any kind of digital information, including computer code that can be executed once two or more parties enter their keys, blockchains enable us to have smart contracts.

This code could be programmed to create contracts or execute financial transactions once a certain set of criteria has been achieved.PaymentsBlockchain would enable higher security and lower costs for banks to process payment between organizations and their clients and even between banks themselves. In the current reality, there are a lot of intermediaries in the payment processing system.Increased trust: With all transactions recorded transparently on a distributed ledger, trust levels throughout the capital markets would increase.Reduced risk: By executing transactions in real-time, a decentralized platform would eliminate counterparty risk and improve the regulation of “naked short selling” and other speculative trading methods.Lower operational cost: A decentralized trade settlement platform could eliminate or change the role of intermediaries, resulting in reduced commissions and other costs.

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Global trade: Such a model will allow seamless trade globally by keeping securities positions on a decentralized ledger, allowing trades beyond existing regional systems.Regulatory reporting: Easier access to transaction information for regulators would reduce the cost of regulatory reporting for market participants.Decentralized Trade Finance A trade finance solution with letter of credit, bill of lading and multi-signature solutions based on blockchain would include the following features: • Carriers issue bill of lading on the blockchain as a digital asset.

• Banks issue letter of credit as a digital asset on the blockchain. • Multi-signature contracts. • Smart-contract-enabled, event-based fund release to ensure speed and transparency.Equity funding: A blockchain-based platform could provide crowdfunding of equity financing using smart contractsHybrid lending: Companies can look for funding from blockchain-based peer-to-peer lenders. Since such lenders would have lower operational costs than traditional banks, they could charge lower interest rates.Inter bank networkingTransactions cut across banking networks such as inter-bank settlements and payment process, resulting in lower settlement time, saving additional costs that are otherwise incurred due to reconciliations.

Document Signing and Records Management Easy sharing of verified documents with third party requestors. • Reduced time for on-boarding users. • Guaranteed processing of the latest version of the documents. • Speedier multi-party verification.