Regtech enterprises utilizing blockchain technology try to address the problem at its source, which is an appealing field for businesses using various ways.
Blockchain is one of the technics that is driving the regtech revolution. Owing to the many potential advantages of blockchain technology, including increased transparency due to a distributed ledger, quicker and more cost-effective through automation, enhanced security via cryptography, and enhanced record-keeping, regtech businesses employ blockchain technology for a variety of use cases.
Following are four applications of blockchain technology in regtech:
Monitoring
Monitoring is another obvious use case because of blockchain's increased transparency. This has a specific application in the blockchain world: monitoring cryptocurrency transactions, which is especially important given the increasing use of virtual currencies for money laundering. Simultaneously, blockchain gives greater traceability and faster investigation wherever properties are digitalized.
Regulatory Fund Management
Asset tokenization of funds business is an additional case of blockchain technology. Due to the influence of automation, smart contracts give an invaluable benefit, but they also cover essential bases for regulatory reporting and real-time compliance with a fund's regulatory requirements.
Record Keeping
The critical problem with Big Data is that it has resulted in large amounts of useless unstructured data. Regtech enterprises using blockchain technology try to tackle the problem at its source, which is an appealing field for businesses using different ways. The concept is to build open data and a distributed ledger that can be tracked internally for auditing purposes and kept safe from prying eyes.
Anti-Money Laundering, Client Onboarding, and Fraud Prevention
AML (Anti-money laundering) and KYC (Know Your Customer ) rules for client onboarding are clear use cases for blockchain applications. Financial institutions must gather data on potential customers before doing business with them. This is a time-consuming procedure regarding both resources and money invested.
The best solution would be a universal ledger that all banks could categorize their customers and track transactions. Nevertheless, as shown by the continuing battle between several blockchain consortia attempting to set universal standards, this isn't easy to achieve.
