This document discusses how blockchain technology can transform the financial services industry. It begins by describing how blockchain works as a distributed digital ledger that allows untrusted parties to validate transactions without intermediaries. It then outlines several core applications of blockchain for banks, including transferring value through cryptocurrencies and smart contracts, managing digital identities through Know-Your-Customer processes, and implementing trade finance and commercial insurance solutions. The document also presents some real-world examples of blockchain being used by banks and financial institutions and concludes by considering whether blockchain presents an opportunity or threat to the 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