Blockchain: Next Generation of BFSI
The BFSI Industry is leading the investment in playing with Blockchain technologies to reform the way business is conducted. It is boasting a clear message that – security and customer satisfaction will be the leading KPIs for the industry 2022 onwards.
Interoperable Health Records
Ensuring effective healthcare to patients implies Providers (Hospitals, Doctors etc.) and Payers (Health Plans, Insurance Companies) working together to collate and analyze medical data such as clinical reports, medical history, claims and prescriptive notes. Keeping in mind, sharing, and collaborating on highly sensitive data such as medical data requires compliance and adherence. Blockchain provides an added ability to keep data and data handling records secure – building trust between the participating parties and significantly advancing the speed and quality of care.
Clearance and Settlements
At present, bank transfers take several days for settlement due to complex processes and bypass intermediaries (custodial services). The SWIFT protocol has the role limited to processing payment orders. The actual process of money reaching the destination comes with additional costs and time. Decentralized blockchain technology can aide banks to settle directly and keep track of transactions in a much quicker way as compared to the existing SWIFT protocol. Blockchain ensures transparent and publicly available transactions providing you greater security.
Credit Reports and Scoring
Blockchain helps individuals and small businesses get loans quickly based on their credit history. Lenders can take a long time to verify the creditor’s creditworthiness. Traditional business credit reports provided by third-party credit bureaus are not available to small business owners. Also, paying 3rd party companies to access your sensitive data seems strange and insecure. However, blockchain can provide tools that allow borrowers to share their credit reports more accurately, transparently, and securely. Blockchain-based credit reporting reduces the cost and hassle of data validation. Also, ownership of the data is no longer retained in the central repository and will be returned to the individual.
Smart contracts are digital contracts that are stored on the blockchain and automatically executed when specified conditions are met. Considering that smart contracts benefit businesses with speed, transparency, security, and accuracy there are numerous use cases for them. Validating the legitimacy of a coverage declared is a time-consuming process – counter-checking the phrases of a guide settlement. Blockchain backed smart contracts provide automatic coverage processing to the insurance companies. Smart contracts permit the smooth submitting of claims and automated validation via the decentralized ledgers of the blockchain network. It reduces the danger of compensating for fraudulent claims.
Major players are leveraging Blockchain to reap benefits in new ways focusing on enhancing customer experience and security of transactions. Previously with ATM transactions, the banks would analyze the electronic journal files received from various ATM machines (such as NCR, Diebold, AGIS, and G4S) and the various file formats on a daily basis as part of the reconciliation process and compare them to the bank’s balance. Internal banking operations must be strong and flexible due to the complexity of data and the demand for openness. All records including deposit of monies in the ATM by Bank personnel as well as transactions by customers at the ATM can be stored securely on the blockchain making them immutable. Ensuring that no one other than the authorized user can access or alter the data significantly reduced the chance of theft or frauds.