Tracking systems have been present in our day-to-day lives for years now. We now see how the Financial Industry is taking it to the next level by using Blockchain to monitor physical trade inventories, through the use of chips. Commodities that are used as collateral for loans can be hard to manage and that is where a technology like Blockchain can help a Financial Institution cut costs, reduce risks, and maximise security. Dutch Bank ABN AMRO has embarked on an innovative solution where they will use Blockchain to communicate with trade investors, which will result in the more efficient monitoring of inventory. Traceability is one of the most important variables that ought be considered in an investment deal - it is a crucial aspect of debt obligations that have a link to oil, coal, silver or other rare metals, for example.
When a bond is issued, the pool of investors that can access it is unlimited which is why a platform that can provide a safe and sound trade inventory seems to be very beneficial for the industry. And so it must be, as worldwide known institutions such as ING Bank are jumping on board. Among others, one of the most important benefits of a solution of this sort is the possibility of perfectly identifying ownership of these debt products at any given point in time with absolute certainty. This does not come lightly because certainty when dealing with millions, even billions at a time, spread across a pool of investors that can have infinite participants, is a process that currently takes days to sort by the Back Office departments in Investment Banks.
Financial security doesn’t come easily and knowing that any form of alteration will be identifiable and useful for prosecuting cyber-attacks must allow investors to rest assured. Failing to use Blockchain will not massively expose investor data and property to hackers and mistakes per se, but adding an extra layer of security has never done any harm. The clarity of information and the transparency of transactions that Blockchain brings, will deeply help smoothen the compound of arduous processes that make a bond's deal come to life.