Blockchain is immutable and decentralized. Utilizing blockchain to create an AML platform assures that no data can be altered, modified, or deleted. If any modification is made, it would be logged and recorded on the ledger instantly.
Fremont, CA: While blockchain has shown its capabilities in strengthening cyber-security, it can also disrupt another area: AML. Technology has become an integral part of people’s life. On the other side, it has also set the stage for cybercriminals to devise sophisticated money laundering techniques. Recently, there is an increase in money laundering cases.
Let us look at some applications of blockchain for KYC and AML:
Ineradicable AML System Utilizing Blockchain
Blockchain is immutable and decentralized. Utilizing blockchain to create an AML platform assures that no data can be altered, modified, or deleted. If any modification is made, it would be logged and recorded on the ledger instantly. Thus, blockchain can prevent any malicious effort for manipulating the data. Any hacker planning to attack the network would require getting through numerous nodes to get hold of data, which is not achievable. Hence, regulators can regulate and monitor data thoroughly. This can undoubtedly improve security and reliability.
Improving Transparency of AML System with Blockchain
Blockchain can manage the entire transaction history in its network. For instance, in the case of Bitcoin laundering, it would be easy to track the hack on the blockchain since each and every event is saved on the platform, which improves transparency. Any doubtful practice, such as transferring huge amounts back and forth from accounts, can raise suspicion and can be instantly reported. Blockchain keeps proof of every single activity.
Increased Efficiency of AML system Utilizing Blockchain for Data Analysis
Smart Contracts are useful to extract data as well as generate reports for data analysis and predictions. Automation can help streamline complicated reporting processes and fasten the process. This allows for lesser expenses and swift transactions.
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