Five reasons to start using Blockchain Technology in Risk and Compliance activities
As compliance costs are surging, many companies are now in the process of reducing and eliminating GRC jobs as they digitise the GRC processes. This change is especially valid for financial institutions that are forced to ending the hiring boom to pay some of the $321 billion in fines from recent years.
Many companies are replacing compliance staff with computers as they face pressure to cut costs. After years of the uncontrolled addition of companies staff, the overall number of people in compliance is reducing as the GRC team is better able to deal with regulatory requirements and provide judgments and at the same time monitoring the surveillance activity by automating GRC processes.
If technology is to replace employees to pay penalties and ensure stakeholder satisfaction, it cannot be substituted by using old school IT platforms. This is where Blockchain and DLT come into the picture. Here are some red flags and areas for review before starting on a Blockchain journey:
- Blockchain technology can decrease the compliance work with about 40%. However, If the goal is not only to “be digital" but management wants to "go digital", remember that it first creates substantial compliance work. These are efforts that are added to the organisation. Therefore make sure that the current digital transactions are right/proven.
- Blockchain can decrease the costs of fraud handling and prevention; However, fraud is also substantial in the digital area. Hackers and Ransomeware culprits have shown that with every transaction that goes digital, there also is a new arena of fraud. Make sure that cutting compliance costs do not result in the costs of fraud and fraud prevention that are even threatening some business models.
- Blockchain can provide regulatory solutions that do not require the identity to be exposed; In the areas of AML and KYC regulations, However, when transactions are regulated identities are traced. There is other compliance requirements where you need to protect the identities. According to the REU GDPR, the identity is the greatest asset and cannot be exploited by design or default.
- The money will be digital in five years; by using Blockchain Technology within the corporation, it is possible to provide an entirely different cost of each transaction and perhaps reduce the costs of transactions, within the corporation. Many Central Banks has already announced their intentions to create a digital currency, probably on a Blockchain ledger.
At the 11th annual European GRC Summit, in London, we will have a separate session on Blockchain and the related ledgers to ensure that it is not just another buzzword