One of the issues that remains a problem for companies around the world is fraud. Risk.net ranked fraud as one of the top 10 operational risks of 2017. However, one technology that may offer a solution is blockchain.

Blockchain is a decentralized shared ledger that is tamper-resistant and creates an environment where information can be viewed, shared, and stored safely. Being able to manage information in such a secure setting helps to promote trust and transparency between businesses and consumers. This is especially critical when it comes to track and prevent fraud in such industries as supply chain, identity management, food safety, and finance.

Any multi-step process, particularly those which necessitate how humans interact with one another or any form of technology are vulnerable to fraudulent behavior. Blockchain allows the sharing of information in real time and the ledger is only updated when all parties involved agree. This is a cost-saving measure, but it also reduces the odds of someone being able to commit fraud.

Financial transactions are often targeted by fraudsters, and Constantin von Altrock, Director of Counter Fraud Management at IBM, has said that payment fraud is a $20 billion-a-year issue, while CNBC reported that in 2017, fraud and identity theft cost consumers $16 billion.

Prompted by this threat, numerous financial institutions and credit card companies have enacted measures that alert customers when a potentially fraudulent transaction is made, but this does not prevent their information from being stolen and used without permission. When polled in a global study conducted by IBM Institute for Business, only 16 percent of banks said they could detect fraud while it was being attempted.

However, if all identifying information was placed on a permissioned blockchain framework, only authorized individuals would have access to it and only those parties who have been authorized to do so could approve and verify transactions.

In spite of all it can do, blockchain is not a guarantee that fraud will never occur, but in instances where it does occur it is usually because services have been layered on top of blockchain without being thoroughly tested. Also important to remember is the fact that blockchain networks are decentralized, while any infrastructure can have back doors which may be vulnerable to unauthorized access. Therefore, it’s essential that industries must use a blockchain that is specifically designed for business which is paired with the correct services and infrastructure.

BLMP ©2018, Singapore

BLMP (Blockchain Licensing Marketplace) is a blockchain technology company working to remove obstacles and facilitate trust in the complex issues surrounding Supply Chain Management transactions in the virtual goods industry.

BLMP Network uses blockchain technology to connect digital platforms around the world with global brands to monetize officially licensed virtual goods across any digital platform; from games to streaming services & social media, allowing millions of users access to a whole new world of branded virtual products.

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