Professional Documents
Culture Documents
Paper Bisdig Final PDF
Paper Bisdig Final PDF
FINANCIAL INDUSTRY
By:
Venia Rezkieta Dewi 1606824490
Hayyin Nur Adisa 1606832851
Kania Mareti Dwibagja 1606833513
Renaldi Makhfudin Fakhran. 1606883524
Signature : 1. 2. 3. 4.
The future blockchain can make automatic claims built on blockchain smart contracts
enable a single version of the truth for claim data, increase trust between parties, and create
a more efficient claims process. Benefits include: more accurate assessments through
historical claims data, integrated data source for all parties, reducing conflicts about claim
value, automatic disbursement when criteria are met, reducing hassle for beneficiary, and
reduced risk of fraudulent claims.
For all financial services firms and users, blockchain could significantly improve
payment transparency, efficiency, trust and security as well as reduce costs. Payments can be
processed in minutes or seconds, while currently, payments from one bank to the other can
take up a week. With blockchain, payments becoming user-optimised, will save a significant
amount of time and money, for both parties involved. Blockchain will remove the need for
middle office and back office staff, as payments settle instantly.
Blockchain services such as KYC-chain are helping financial firms streamline KYC –
a labour-intensive and error prone process – across their organisations, reducing the
duplication of workload and increasing trust. KYC utilities (shared repositories) are
investigating whether blockchain can improve their offerings, potentially providing KYC
updates to banks in real-time. Financial institutions across the world are responsible for
complying and reporting on a number of requirements from their local regulator. KYC is a
key requirement here, but the process can be incredibly time consuming and lack the
automated customer identification technology and integration needed by teams to efficiently
carry out their work.
Blockchain technology could provide a digital single source of ID and other
information allowing for the seamless exchange of documents between banks and external
agencies. This could potentially result in automated account opening, reduced resource and
cost, whilst maintaining the privacy of data that is legally required.
Smarter reconciliation
When transactions are settled at that moment in time, it will remove a significant risk,
that of the counterparty not being in a position to meet its obligations, which could be a
substantial expense for financial institutions.
One of the main features of blockchain is that it removes the need for a trusted
intermediary and makes peer-to-peer transactions possible. When blockchain is applied in the
financial services industry, it could render redundant the fee-charging intermediaries such as
custodian banks (those that transfer money between different banks) or clearers (those
vouching for counterparties credit positions). As such, blockchain offers better capital
optimisation, due to a, significant, reduction in operational costs for financial institutions.
Smart contracts are expected to be the biggest contributor to the appeal and success of
blockchain. This new way of contracting goods and services will be managed by
self-operating computer programmes that mimic the 'real-life' legal and financial contracts we
use today
3.3.2 Blockchain: Advantages for Accounting Profession in Financial Sector
The blockchain technology promises a lot of advantages for the accounting firms whether big
or small. Here are few of the benefits:
Further, blockchain allows for the use of tools like “smart contracts,” which could
potentially automate manual processes, from compliance and claims processing, to
distributing the contents of a will.For use cases that don’t need a high degree of
decentralization — but could benefit from better coordination — blockchain’s cousin,
“distributed ledger technology (DLT),” could help corporates establish better governance and
standards around data sharing and collaboration.
With global banking currently a $134T industry, blockchain technology and DLT
could disintermediate key services that banks provide, including:
Modifications of Data
It also poses a problem with the modification of data. The banking and finance sector make
regular modifications to the data they store, especially data involving a transaction. The
Blockchain system, posing difficulties in such modifications, becomes more of a liability than
an asset for the business. Therefore, most of these finance companies result in declining its
use for transaction recording. The procedure of data entry is also long. Considering that the
transactions in the finance sector may be numerous every day, such a long procedure may
delay the recording of any such transaction, thus, rendering the system inefficient.
Literacy Requirements
The blockchain system requires a high level of literacy, more so, computer literacy. As such,
illiterate employees cannot make a proper recording in the system. It, therefore, forces the
company that employs it to hire literate employees. Hiring such employees is an expensive
task for the business. Therefore, many firms choose top retail to their current labor force
rather than adopt the system and later must change major sections of their labor force. The
alternative is to educate the current employees. This is also an expensive undertaking, and
therefore some companies may prefer not to adopt it.
Duration of Blockchain
There is no certainty that the transactions recorded in the system will last for a long time. The
operations of the system are cryptic, therefore, there is no certainty of how long the
transactions may last in the system. Most financial transactions require information about the
past transactions and their future impact. If the duration of such records is uncertain, it makes
the system ineffective in the financial sector. The computing language of this system is
complicated and difficult for ordinary people. The computing language, too, poses as a major
blockchain problem today.
Blockchain Regulations
There are many blockchain regulations. Such regulations are challenges to any business.
Most businesses prefer to operate and use systems that have few regulations to save time
during the setup period. Therefore, the long procedures and regulations during the
implementation of the blockchain system is a major discouragement to these businesses.
Blockchain implementation requires the use of computers. As such, problems affecting the
computers such as processing power and viruses highly affect the system. Computers also
require power. The dependence on power makes the systems unreliable in case of power cuts
or power shortages. Most businesses require systems that can handle such power cuts. Using
the blockchain system would require the business to have a manual backup system.
CHAPTER IV
CONCLUSION
If blockchain technology is attracting unprecedented attention from senior management,
it is because the potential impact on current business models raises a host of questions.
Blockchains will help to manage increasing global complexity by combining security,
decentralisation and transparency. They will give power back to the customer and will help
bring new players into the market.
The technical limitations of blockchains must be considered. However, the fact remains
that the use cases for which blockchains are paving the way will be deployed regardless,
whether with blockchain technology or with an alternative. For the insurance industry, the
number of potential use cases goes well beyond those discussed in this report, with varying
impacts on the value chain. Certain uses seem easier to implement and appear to offer
significant benefits, while others may be riskier, particularly in light of the expected rewards.
Roles of accounting in the banking industry is the most important part because it
involves stakeholders and requires compliance with the rules and regulations in a country.
With the blockchain, the role of accounting in the banking industry will be greatly helped
because all matters relating to the banking industry will become integrated. The Blockchain
will make it easier for accountants in terms of adjusting to state regulations that will have an
impact on the auditor's work in carrying out the audit process, both external and internal to
the bank.
The scope of possibilities brought about by the blockchain is huge in the insurance
industry but will require a period of adaptation and adjustment. The key challenge for all
players, irrespective of their industry, will be to identify the use case that will be of most
benefit to them and to explore others if their first choice proves unsuccessful.
REFERENCE
Akeo. (2016). Blockchain in Banking & Finance. Retrieved from www.akeo.tech (Access on
May 25, 2019)
IDRBT. (2017). Applications of Blockchain Technology in Banking and Financial Sector in
India. Retrieved from http://www.idrbt.ac.in/assets/publications/Best%20Practices/BCT.pdf
(Access on May 25, 2019)
Cognizant. (2016). Blockchain in Banking: A Measured Approach. Retrieved from
https://www.cognizant.com/whitepapers/Blockchain-in-Banking-A-Measured-Approach-cod
ex1809.pdf (Access on May 25, 2019)
Deloitte. (2018). Banking on the Future: Vision 2020. Retrieved from
https://www2.deloitte.com/content/dam/Deloitte/in/Documents/financial-services/in-fs-deloitt
e-banking-colloquium-thoughtpaper-cii.pdf (Access on May 25, 2019)
Sarah Morris. (2017). Will Blockchain Disrupt Finance Services. Retrieved from
https://www.gartner.com/smarterwithgartner/will-blockchain-disrupt-financial-services/
(Access on May 27, 2019)
Microsoft. (2018). 5 Ways Blockchain Transforming Finance Industries. Retrieved from
https://www.ingwb.com/media/1609652/banking-on-blockchain.pdf (Access on May 27,
2019)
PWC. (2018). Blockchain, A Catalyst For New Approach In Insurance. Retrieved from
https://www.pwc.com.au/publications/pwc-blockchain.pdf (Access on May 27, 2019)
https://www.thebalancecareers.com/the-financial-services-industry-1287307
https://www.liputan6.com/bisnis/read/3247396/3-sektor-usaha-ini-beri-kontribusi-besar-buat-
penerimaan-pajak
https://shodhganga.inflibnet.ac.in/bitstream/10603/2031/10/10_chapter%201.pdf
Crosby, Michael. (2015). Blockchain Technology. Retrieved from
http://scet.berkeley.edu/wp-content/uploads/BlockchainPaper.pdf (Access on May 26, 2019)
Wachal, Maria. (2019). What is the benefit of blockchain technology?. Retrievied from
https://www.quora.com/What-is-the-benefit-of-blockchain-technology (Access on May 26,
2019)
Coindesk. (2015). How Does Blockchain Technology Works?. Retrieved from
https://www.coindesk.com/information/how-does-blockchain-technology-work (Access on
May 26, 2019)
Akeo. (2018). Blockchain in Banking and Finance. Retrieved from ... (Access on May 25,
2017)
http://www.mondaq.com/x/691750/Financial+Services/The+Impact+Of+Blockchain+On+Th
e+Financial+Services+Sector
https://hackernoon.com/how-blockchain-will-write-a-new-era-for-accounting-industry-f8832
bf24167
https://www.cbinsights.com/research/blockchain-disrupting-banking/
https://www.techfunnel.com/fintech/blockchain-technology-challenges-in-the-finance-sector/