India Inc’s growth continues to be dominated by digital transformation strategies. Today, new-age technologies can offer limitless possibilities to improve business processes, becoming pivotal across different departments and service lines. According to EY’s Global Forensic Data Analytics Survey 2018, the use of emerging technologies will continue to see an uptick in the coming year. The survey adds that 32% of anti-fraud professionals planned to adopt Blockchain and distributed ledger technologies in 2019.
Blockchain involves layering transaction information in the form of a hash block which is added to a distributed ledger that records all such transactions. The rising popularity of the technology is driven by its ease and efficiency; Blockchain offers features of scalability, decentralisation, transparency and security to multiple parties. Corporate India has been fairly quick to capitalise on this disruptive trend and the acceptance rate continues to soar. For instance, the banking sector is an early adopter, enabling blockchain in smart contracts to prevent double-financing in money transfers. Fintech providers as well as digital payment companies are also considering its benefits. On the other hand, the real estate sector looks to minimise incidences of selling the same property to two different parties, and reducing benami properties by authentication of the parties.
One of the more interesting applications has been in the development of identify management and information sharing networks that use Blockchain based ledger to identify who has access and control on your online information, transactions and preferences. This implementation of Blockchain will be especially useful for companies that may have to identify users’ information under the new General Data Protection Regulation (GDPR) rules as well as the upcoming Indian Personal Data Protection Bill. Blockchain can also be used to protect against counterfeiting. For example, globally EY has assisted in building “The Wine Blockchain” platform to enable retailers as well as farmers to use an encrypted digital signature for registration processes. This way, their customers can authenticate purchases, and mitigate the risk of using counterfeit products.
While the response to Blockchain has been positive, there are many challenges. The technology itself might be secure, but the inputs remain vulnerable. Devices that feed transaction information can be compromised by cyber criminals, or passwords to access and add transactions may be inadvertently leaked or stolen by social engineering. While Blockchain adoption may still be at a very nascent stage in India, the future remains robust and bullish. The technology’s use in mitigating fraud and enhancing the integrity of transactions will make it an essential component in anti-fraud and compliance programmes.
The above article is co-authored with Pavan Jankiraman, International Director, Forensic & Integrity Services.
It has first appeared in The Financial Express and can be accessed here: https://bit.ly/2Xoslqk