A brief review of blockchain and its relation to financial Industry

1. B L O C K C H A I N A N D F I N A N C I A L
I N D U S T RY T R A N S F O R M AT I O N
F U T U R E O F F I N A N C I A L I N D U S T RY

2. • Iranian Fintech Solution Provider
• Data Science, Digital Signature, Blockchain, Open APIs
• Since 2014

3. F I N A N C I A L S E R V I C E S I N D U S T RY
Facilitating the trusted exchange of
value between multiple, untrusting
parties

4. F I N A N C I A L S E R V I C E S I N D U S T RY
• Costly intermediaries, manual
processes, and error-prone
reconciliations
• Need for more efficient cross-
organizational collaboration, and
eliminate intermediaries

5. B L O C K C H A I N
• A digital, distributed transaction ledger with identical copies
maintained on each of the network’s members’ computers
• All parties can review previous entries and record new ones
• Transactions are grouped in blocks, recorded one after the other in a
chain of blocks
• The links between blocks and their content are protected by
cryptography
• Previous transactions cannot be destroyed or forged
• The transactions are trusted without a central authority

6. B L O C K C H A I N
• Appeared in 2008 as the basis of the Bitcoin protocol
• Combination of cryptography and distributed systems
• A technology for addressing multi-party business
processes and value exchange without complex
shared data schemes and third-party intermediaries

7. B L O C K C H A I N
• The technology of trust
• Eliminating the need to trusted third-party

8. C O R E A P P L I C AT I O N S F O R B A N K S
B L O C K C H A I N
Transfer of Value
Smart Contracts
Digital Identity

9. T R A N S F E R O F VA L U E
• Cryptocurrencies: (Bitcoin, Ripple, …)

10. R I P P L E
• RTGS: Real-Time Gross Settlement
• Currency Exchange
• Remittance Network
• Share Trading

11. S M A R T C O N T R A C T S
• Computer programs that facilitate, verify, or enforce
the negotiation or execution of an agreement
• Trackable and Irreversible
• No third parties
• Multisignature accounts, escrows, multi-party lottery
with no operator, Life term insurance, …

12. E T H E R E U M
• Distributed computing platform and operating system
• Initial release date: July 30, 2015
• By a 19 Years old student: Vitalik Buterin

13. I D E N T I T Y M A N A G E M E N T
• KYC: Know Your Customers
• Users don’t need a new registration for every service
provider (like Banks)
• Faster customer onboarding process

14. K Y C
• KYCstart: A PoC KYC-as-a-service solution using
blockchain technology, developed by Deloitte
Luxembourg
• blockchain KYC in Singapore: PoC tested by HSBC,
OCBC, and Mitsubishi UFJ Financial Group.
Passed the Monetary Authority of Singapore’s tests in
May 2017

15. C O R D A
• An open-source distributed ledger platform
• a consortium of more than 200 firms (Banks and Technology
Providers)
• Multilateral Ledger: participants only have copies of the
transactions they are participants to or observers of
• March 2018: Credit Suisse and ING completed the first live
securities lending transaction worth €25 million
• April 2018: Fusion LenderComm lunched. A platform for
syndicated loans

16. B L O C K C H A I N AT W O R K :
# 1 T R A D E F I N A N C E
• Issuing an SBLC in days, not weeks
• Bank of America Merrill Lynch collaborated with
Microsoft to digitize and automate the credit
assessment process
• Issuing an SBLC in just 3-5 days (instead of 3-5 weeks)
• Using Corda and Microsoft Azure

17. B L O C K C H A I N AT W O R K :
# 2 C O M M E R C I A L I N S U R A N C E
• April 2018: first commercial blockchain solution for
proof of insurance
• Marsh Collaborates With IBM, ACORD, and ISN
• Using Hyperledger Fabric technology and IBM
Blockchain Platform

18. B L O C K C H A I N AT W O R K :
# 3 R E G U L AT O RY C O M P L I A N C E
• Massive Autonomous Distributed Reconciliation (Madrec)
• By Swiss banking giant UBS and Credit Suisse, Barclays,
Swiss exchange operator SIX, Belgium's KBC and data
supplier Thomson Reuters
• A blockchain infrastructure that enables each participant to
put their dataset on the blockchain for review for MiFID II
• Based on Ethereum Smart Contracts, hosted in the
Microsoft Azure cloud

19. B L O C K C H A I N AT W O R K :
# 4 L O YA LT Y A N D R E WA R D S
• UBS Bank Loyalty System
• Crypto-Tokens “Key Points”
• Move the principle of the «Key Club» into the digital
age
• Developing in a laboratory at Level39 Fintech
accelerator

20. O P P O R T U N I T Y O R T H R E AT ?

21. R E F E R E N C E S
• 5 ways blockchain is transforming Financial Services
https://azurecomcdn.azureedge.net/mediahandler/files/resourcefiles/five-ways-blockchain-is-transforming-financial-services/
five-ways-blockchain-is-transforming-financial-services.pdf
• 5 blockchain technology use cases in financial services
https://www2.deloitte.com/nl/nl/pages/financial-services/articles/5-blockchain-use-cases-in-financial-services.html
• Distributed ledger technology and bank guarantees for
commercial property leasing
https://www.ibm.com/industries/au-en/banking/downloads/Whitepaper-Bank_Guara.pdf
• Could blockchain be the foundation of a viable KYC
utility?
https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2018/03/kpmg-blockchain-kyc-utility.pdf

22. A L I H . M O G H A D A M
A L I @ A D A N I C . I R
W W W. S L I D E S H A R E . N E T / A L I X O C R A C Y