Online Fraud Detection: Blockchain Can Be a Powerful Tool for Indian Businesses

Blockchain technology was developed to reinforce digital currency bitcoin, and is considered the most efficient technology against cyber fraud that allows financial transactions to be verified electronically over a network of computers.

While relatively nascent in India, the country too plans to embrace the Block Chain technology because of increased cybercrime in financial institutions. India’s southern state of Andhra Pradesh has been named as the first in Asia to introduce the Block Chain Technology Institute last month. This technology ensures security and scale by using a dispersed network.

Alex Tapscott  in a Forbes report explains,blockchain is a vast, global distributed ledger or database running on millions of devices and open to anyone, where not just information but anything of value –like money and units of energy - can be moved and stored securely and privately peer to peer, and where trust is established, not by powerful intermediaries like banks, governments and technology companies, but rather through mass collaboration and clever code.

In India too, IT services and solutions companies are stepping in to leverage emerging blockchain technology applications for customers across market verticals.

Here are some sectors that plan to significantly invest on Blockchain.

BFSI

Banks are investing on implementing blockchain. This will resolve issues surrounding high rate on transactions and will allay the commotion expected from other financial institutions offering financial services at a lower cost than the banks themselves.

According to a blogpost on Infosys Finacle site by Rajashekara V. Maiya, blockchain technology has created a lot of buzz in the technology landscape compared to any other technology in the past. Perhaps, blockchain is considered to be the biggest disruption post ‘internet’.

A recent report by World Economic Forum (WEF) shows that 80 percent of banks are predicted to start blockchain projects by 2017 and $1.4 billion has been invested into the technology over the past three years. 90 central banks are looking at the technology. In the Indian context, even RBI is optimistic about advantages of using blockchain to prevent cheque frauds. There are many identity-related blockchain projects where organizations are focusing on know-your-customer (KYC) for banks.

Intellectual Property

With the rise of the internet, it is becoming increasingly difficult to protect digital intellectual property. Many new companies are coming up to address this issue with the aid of blockchain technology.  blockchain is mostly linked with bitcoin and cryptocurrency, but its realm speeds beyond that. As blockchain is used as a virtual decentralised ledger to track bitcoin transactions, it can also track the actual rights of all kinds of digital content and Intellectual property from logos, to music, to books, to everything.

Energy

According to a Finextra report, the energy sector has seen significant changes over the past few decades across generation, distribution, storage, and consumption. The result is a complex, non-transparent and inefficient energy market leading to a lot of waste. Put simply, there isn’t a single, publicly available ledger of all energy transactions that take place in the industry. Though the data is there, it is very fragmented, hard to interpret, and largely underused as a result.

Blockchain infrastructure would provide an open, transparent and timely way to record transactions in the energy business, from generation through consumption.

Supply Chain

Global supply chain can add transparency and auditability with blockchain technology. Every time a product changes hands, the transaction could be documented. This will create a permanent record of a product, from manufacture to sale. blockchain technology reduces leaks in the chain and reduce time delays, added costs, human error and insurance costs.

Also Internet-of-Things (IoT) plays a major role in this vertical. Here IoT sensors can record sessions of objects on the blockchain, which will provide data diligence and optimize cost.

Government

Government has innumerable data all across, so we can imagine the settlement of all the dissidence if blockchain is used. It can also bring more transparency to the tax structure and citizens could gage how the money is being spent.

Also by moving the registries to blockchain, government can save money, increase transparency, and cull corruption.

According to a IndiaToday report, in possibly a first in Asia, Andhra Pradesh government has introduced blockchain technology to prevent incidents of cybercrime. It has introduced the technology in some departments to protect the database from being hacked.

However, Eric Piscini in a TechTarget report opined, “Mass adoption will not happen unless we have a regulatory framework and today these frameworks are inconsistent at best, and nonexistent in a few cases.”

“In addition, our legal environment needs to evolve to account for specific smart contracts, which are business logic running on blockchain and automatically executed, to be recognized in court,” said Eric.

Clearly, with rapid adoption of blockchain technology, the enterprises offering the same have a huge potential market to tap in 2017 and beyond.