10 August 2016
How Blockchain Can Revolutionize Regulatory Compliance
By Cliff Moyce
Cliff Moyce, Global Head of the Finance Practice at DataArt, authors an article for Corporate Compliance Insights on the possible applications of blockchain technology in the regulatory compliance processes.
“Blockchain’s immutability also lends itself to the application of proof-of-process for compliance. Blockchain could be used to keep track of the steps required by regulation. Recording actions and their outputs immutably in a blockchain would create an audit trail for regulators to verify compliance.
Almost as importantly, regulators could have read-only, near real-time access into the private blockchain of financial organizations... Such a change could reduce dramatically the time and effort (and therefore cost) that financial institutions spend on regulatory reporting, as well as improving the quality, accuracy and confidence of and in the process.
Another regulatory field where blockchain could play an important role is in KYC (know your customer) and AML (anti-money laundering). Banks and other financial institutions have to complete many tasks and steps as a part of the onboarding process for new clients…Many of the steps could be eliminated if the information existed already in a secure, tamper-resistant database – an immutable blockchain... The chain would provide records of procedures and compliance activities for each client... so all these steps are easily traceable and regulators can be confident about the veracity of the information.”