BLOCKCHAIN AND REGULATORY COMPLIANCE Yoseph Elkaim Whereas cryptocurrency may have created the environment under which Blockchain technology was introduced, by no means are these two technologies codependent. Rather, Blockchain is a byproduct of people’s inherent interest in streamlining transactions and not strictly limited to cryptocurrency. And while the Blockchain is shifting the transactional landscape, it’s also poised to disrupt the financial services industry.
Source: https://www.shieldfc.com/
BLOCKCHAIN – MORE THAN JUST BITCOIN As soon as data is saved into a Blockchain, it can’t be changed or deleted except as allowed by the chain’s validation algorithm. This makes Blockchain particularly attractive to users as a method for the transfer of any digital asset, but this isn’t limited to just bitcoins or other digital currencies. New Blockchain applications are shifting financial services markets in yet-unknown ways. But the fact remains that competing in the evolving landscape of global finance means making sure that your operations don’t become outdated.
BLOCKCHAIN AND COMPLIANCE Globally, businesses spend about $436 billion each year on compliance. And with new Risk and Compliance rules, including KYC (know your customer) and AML (anti-money laundering), seemingly being developed every day, it’s no surprise that I’m often asked about how companies can get a leg-up on the increasingly complex regulatory environment.
BLOCKCHAIN AND REGULATORS Blockchain technologies can improve private regulatory compliance, but the Blockchain can also help regulators. This is possible because Blockchain lends itself to the improvement of compliance processes, as it can be used to help compliance officers keep track of the steps required by complex regulations.
BLOCKCHAIN IS NO SILVER BULLET Financial institutions considering the Blockchain must balance the potential costs against the known risks, which includes inherent challenges for internal auditors, including: Technical Competency Issues. Blockchain is new, and most IT audit departments simply don’t have the relevant experience necessary to run these systems. Blockchain is Untested. It was invented within the first ten years after the turn of the millennium, whereas many reliable enterprise software applications have been under development for decades Non-Transferrable Control Methodology. For the most part, the processes that have governed best practices in internal and external audits are exchangeable.
At the end of the day, implementing any new technology can be risky, but leaders in the evolving global financial services marketplace must think out of the box if they’re going to compete effectively. Source: https://www.shieldfc.com/