A Secure Blockchain based Finance Application

Abstract

Blockchain is undoubtedly one of the most potentially attractive technologies for the organization of financial services. The significance of the Blockchain technology in a banking system can be determined by three main principles that is; Disintermediation, Transparency and Provenance. The DLT (distributed ledger technology) eliminates the need for trust enforcer in the banking management system. This is made possible by the tamper- proof data in the distributed data records and all the participants in the network have the same version of data record with them at all times and it is unalterable. Blockchain promotes a public database record of all the customer transactions and other data, ensuring a transparent and trustworthy system as the customers have a 24x7 real-time access to it. Blockchain keeps an immutable distributed data ledger of transactions and this result in maintaining a lifecycle of the assets and its ownership from its first transaction to the most recent one. It reduces the chances of occurrence of theft, insurance fraud and misselling of the high valued assets or intellectual properties. Blockchain can be implemented in the banking sector for various applications like maintenance of data confidentiality, cheque clearing system, real time money transfer system (digital currency), supply chain finance, insurance, trade finance, KYC (know your customer), cross-border payments/transactions system, monitoring of consortium accounts, auction system and digital asset management. Blockchain technology can hence enable a decentralized solution for the banking ecosystem. The proposed system enables one platform for both the lenders and the borrowers to initiate their money transaction for lending, borrowing and repayment of the loan money. The transactions made throughout, that is, from the start to the last repayment can be viewed easily on a blockchain network thus increasing the transparency and trust of the customers and it resolves any disputes that can arise in the loan system. Along with this, a KYC registry based on blockchain is also proposed which will help in maintaining the KYC details in one platform which can be accessed by various banks for identification and verification of the customer in an easy and faster manner. It will increase the customer satisfaction as there will be no need for the customer to perform a KYC check every time he/she creates a bank account in any bank as the bank can easily access their KYC details from this system.