July 20, 2022
Due diligence, data verification, and authentication is not a static one-time process, it is dynamic. Once it is complete, information may change or expire, thereby posing a sizeable business risk. The process is highly fragmented involving a number of parties, including external validators. Third-party validations cause bottlenecks in the system, slow the process, and increase costs. Litigation is reliant on the authenticity of a document and different parties present their own versions of a document that may not be identical. Bad actors can manipulate documents and users don’t want to rely on third-party custodians, given the risks of deletion, and errors outside the user’s control.
The Potential of Blockchain
Blockchain technology shows immense potential to cause a paradigm shift for a modern-day organisations in their day-to-day operations. Despite its apparent complicated nature, it is just another method for recording transactions — also known as a distributed ledger. Data on a blockchain is stored in the form of blocks that is fixed in structure. The central parts of the blocks are:
· Header: includes a unique block reference number, time of the block created and a link back to the previous block.
· Content: encompasses a validated list of digital assets and instructions such as transactions made, amount, and addresses of the parties involved.
Since the blocks are linked together the information is verifiable and independently auditable and at the same time participants are big in numbers making it difficult for bad actors to overcome the verification activities.
KwikTrust and its integration with Blockchain
KwikTrust was born from inefficiencies experienced in the process of completing the due diligence investigations in a timely manner, and the high cost incurred due to a labour-intensive process, and the inherent business and financial risks caused by the integrity and the dynamic nature of the information. KwikTrust is an Innovative due diligence, data verification and authentication platform, utilising blockchain and machine learning technologies to automate the process and reduce costs. The KwikTrust solution provides broader functionality including document storage integrated with an immutable blockchain ledger, therefore also competes with manual due diligence processes and those provided by professional services providers.
KwikTrust is built on hyper ledger fabric which allows for the generation of certificate signatures and validations to be managed on chain. This provides authenticity as blockchain transactions are verified on the chain on basis of consensus and are immutable in nature. The decentralised nature of blockchain ensures that data cannot be tampered with and there is no central point of failure. KwikTrust is delivered as a web-based solution and is compatible with mobile or tablet devices for use in the field.
The use cases for blockchain technology in this field are extremely broad, and we are probably only just scratching the surface of what is possible. Some examples include collating evidence for a legal case, so all parties agree in advance that the record is true, saving time for the courts; sending invoices to customers on the blockchain to prevent fraudsters from intercepting emails and changing bank details; making company records tamper-proof such as a shareholders’ register and share certificates.
There are also opportunities to expedite processes where legislation has perhaps not yet caught up with technology. An example might be recording property deeds and transactions on a blockchain using a common platform so all parties involved in a transaction can collaborate. Can you imagine not having to phone your lawyer for updates on your property purchase, instead being able to view all stages of a transaction online, with legally validated information, in real-time?
As the world (hopefully) starts to emerge into a post-pandemic new way of working, engaging and collaborating, new tools will be needed to effect these changes. Exciting opportunities exist for those who can embrace the change!
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