This research study is based on analyzing the utilization and importance of blockchain technology to the banking sector of Australia. Blockchain is considered to be the backbone of the technologies like digital cryptocurrency and Bitcoins. Blockchain is considered a distributed database of the records of all kind of transactions are the digital events which were executed as well as shared among the participating parties. Each transaction has been verified by majority of the participants in the system (Resrarch.ibm.com. 2020). It contains individual record of transactions. The Bitcoin should be considered as most popular cryptocurrency and it is one of the most phenomenal examples of blockchain technology as well. Blockchain technology was initially brought into light when Satoshi Nakamoto published the white paper on the subject of Bitcoin. In the publication happened in the year 2000. Blockchain helps in recording transactions over a digital ledger which helps in distributing network and making it incorruptible. Anything significant like land asset, cars and so on can be recorded with help of blockchain as the transactions. Blockchains mainly what with the famous use of Bitcoin. Bitcoin is a form of cryptocurrency and it is usually used for exchange of digital assets over the online media (Kuhn. 2019). Bitcoin uses the cryptographic proof rather than third party as a trustee between transaction of two parties for execution of the transactions over internet platform. Digital signature is used which is considered safe for in case of each transactions.
Benefits Of Blockchain Technology
- Time saving: it enables access which no Central authority verification required for settlement making the process fast and quite cheap
- Cost Saving: blockchain network helps in reduction of expenses in multiple opportunities. Each discards the need for the third-party verification and participants might share assets directly. It helps in reduction of intermediary and also helps in in minimising transaction referred as all participants have the copies of the shared ledger
- Tighter security: it implies that it is impossible to temper blockchain data as it shares millions of participants. It makes this system safe against cybercrime as well as fraud.
Implications Of Implementing Blockchain Technology In Financial Services Of Australia
Scientists associated with research in financial sector are working on utilising innovative blockchain-based solutions for the largest and multiple areas of significant financial services. The objective of the solutions is reduction of inefficiency followed by tackling of Fraud and increment of regulatory compliance in large number of utility-based areas. These areas include cross border payments, corporate KYC processes, bank guarantee and so on. The distributed ledger technology which is the commonly perceived as blockchain technology is still emerging in Australia. Never the less researchers claim that it possesses the potential of transforming the way in which the financial organisations in the mainstream as well as the digitised economy-based operations of the Australian mainland transact in multiparty business network. It helps in significantly reducing the level of risk as well as enabling new and some innovative models in business (Rttnews.com, 2021). As per outlook of instant essay help experts Blockchain technology will allow the business enterprises in Australia having common interests in creating scope for shared ledger which will be distributed across participating entities of business domains. Nevertheless the biggest fundamental advantage of using this technology is that the data processed as a part of networking will be immutable and final and auditable. There is no doubt that this is a very innovative solution however financial teams of respective organisations are working on eradicating challenges associated with scalability followed by data management and even corporate governance. Some of the primary cases where innovative blockchain technology can help in escalating the significance of customer service in the financial domain of Australian mainland are as follows:
- Bank Guarantee: blockchain will replace the paper-based bank guarantee system with the shared digital recording infrastructure for significant improvement in efficiency as well as reduction of the potential for making fraud
- Cross Border Payments: blockchain will reduce the payment reconciliation time and also improve the capital allocation followed by capital management within the corresponding banking relationships
- Shared KYC: blockchain technology will help in reduction of the costs related with customer onboarding process which will in turn increase the scope for better customer experience and improvement of the regulatory compliance in dealing with new customers (Staff, 2021). Nevertheless in order to do so the blockchain technology will also lead to increasing the transparency level of the process such that privacy of the customers are maintained and consent from customers are required for information exchange.
3. Using Blockchain Technology In Australia
3.1 Bank Guaerantees
How does the 4 front line banking operations of Australia three banks are using blockchain technology for digitization of the bank guarantees after development of a sustainable digitized platform which is known as Lygon. This platform is based on collaboration between IBM technologies of Australia and the shopping center company of Australia which is popularly known as Scentre Group Ltd. The infrastructure is based on the blockchain technology working platform of IBM technologies. This blockchain-based technology will help in collaboration of the Australia and New Zealand banking group limited or popularly called ANZ Bank, the Australian commonwealth Bank as well as the Westpac banking corporation of Australian introduce time frame for processing of bank guarantee (Musharraf, 2021). Isometrics at the current timeline for the apparent time consumed for the process is 30 days and after the unanimous implementation of the blockchain technology by these three bands the process will take a maximum time frame of 24 hours. It is evident that bank guarantee are sometimes a significant part of retail property lease. Nevertheless the bank guarantee helps in protection of the concerned parties by means of contractual agreement. Credit risk level is reduced as an outcome of transfer in bank guarantee process. In this case we usually involved parties issue bank guarantee for proving their respective financial bonafides as well as capability. The screening process is done by the bank and the fact whether the applicant is creditworthy is also assessed by the bank before issue of the guarantee.
3.1.1 Detailed Role Of Lygon
Lygon is the concerned blockchain technology-based platform necessary for transformation of the process described in the above section. The Life pi lot for this software is commenced by 5 organisations along which test groups from five retail property leasing customers. For a sustainable time period bank guarantee has been instrumentation process completely based on paperwork relying on physical delivery as well as manual verification. Nevertheless manual interference can create score for inefficiency as well as fidelity of the risks related. However as said by Essay writer Busselton the digitization of the process will definitely reduce the scope of fraud for the parties involved and reduction of the potential for causing perennial error (Eyers, 2021). Nevertheless in spite of all these advantages it is worth mentioning that the speed of the service delivery will be exceptionally increased. On one hand if the fraud risk is reduced and on the other hand if Significant volume of money guarantee is insured by banks faster than this process will be evidently appreciated by the corporate world. Paperless processing along with insurance the help of proper banking protocol along with issue of the guarantee is alleviating costs related with the process along with the risks related with the process. Paper based guarantee increases risk as well as related with issue followed by exchange and retrieval of the data followed by sanctioning. Nevertheless it provides more authority to concerned parties exchanging interests in the bank guarantee process by providing them process of tracking as well as reporting and invalidating status of the bank guarantee during the project life cycle. In fact the manual effort associated with review as well as negotiation of different terms and conditions during contract development with multiple parties are also reduced (Foth & McQueenie, 2019). It allows communication to take place between the authorised parties on the basis of immutable and easily distributed ledger. The concert blockchain technology-based software provides real-time visibility to concerned parties during guarantee amendment procedure. Then the beneficiaries might manage end to end processing for the bank guarantee in a single place which helps in reduction of the operating expense as well as fraud. Beneficiaries might put forward partial demand and if required full demand by means of Lygon. Transferring guarantee has become simple nevertheless more secure process.
3.2 Better Shared Corporate KYC Process
Blockchain enables guarantee locking so that terms can be altered and the same might be shared with users in a secure pattern using entitlement control developed into the blockchain technology process. And deployed for managing the documentation in other banks incorporating the meet your client or the know your customer regulations. According to the general manager in the corporate Banking segment of Westpac which is a famous Bank of Australia the existing database managing bank guarantee has generally required the acumen of frustrating the customers or other banks who transacted on the basis of this infrastructure with Westpac. This is because management of physical documents have been painful and cost India in. Guarantees have been lost as well as misplaced on many occasions And on some other occasions the fraud risk has been evident (Guo & Liang, 2016). Nevertheless audit trail or reporting can also be clunky and standardization might not be followed easily. Nevertheless with the help of software based on blockchain technology created a way for addressing measurement of these issues. The national Bank of Australia test blockchain technology however did not accept software build on that basis. However the bank did not show the courage to test the technology during the financial stop gap during the coronavirus spread out period. However situations are rife that are the Australian national Bank can incorporate themselves as a member of the compensating technology anytime. The regulators of the national Bank including the ARPA, ASIC or ACCC along with the reserve Bank of Australia and the treasury of Australia has been informed about the plans of synchronisation and all sources are supportive of incorporating blockchain technology full-stop nevertheless the sanctioning of these regulator’s gives the platform of blockchain scope of reducing the risk to a further level as database access will be permitted (Xu et al., 2016). Therefore the risk of fraud related with significant volume of money which has been previously guaranteed by banks of Australia will now be safer. However the banking operations can make use of blockchain technology to do much more in individual segments of financial service provision. For evidence, Lygon technology can be used in in association with Australian energy market operator for determination of the various ways in which blockchain can be used for management of guarantees provided to the retailers or generators or state government. For more details on banking operations, you can also ask assistance of online coursework help experts of SourceEssay.
The reserve Bank of Australia collaborating with the commonwealth Bank as well as Australia and national bank and the Perpetual and consensys software is working on the project for exploring potential utility and widespread implications of the central bank digital currency which will be using the distributed ledger technology. This project incorporates involvement of a proof of conceptualization. This will be immensely important for issuing tokenized forms of the digital currency from the central bank used by that wholesale market participants. The purposes which will be served by this form of digital currency includes funding followed by settlement as well as the repayment of the tokenized syndicated loans however absolutely on the DLT platform. Michelle Bullock the assistant governor of The reserve Bank of Australia demonstrate the objective behind launch the digital currency is exploring implications of the currency in terms of increasing efficiency as well as better risk management and fostering innovation in the entire wholesale financial market and preferably in markets transactions. In initial part of November 2020 the reserve Bank of Australia declare that the public cases for issuing general purposes or retail based digital currency is still to be implemented (Anjum, A., Sporny & Sill, 2017). Nevertheless no judgement has been passed regarding the applications developed for the bank-to-bank transactions. However it can be presumed that the processes are highly anticipated. The central bank of Australia based Andrew Hinchliff highlighted that the distributed ledger technology will have far reaching consequences intended towards financial services in Australia. The central bank of Australia already perceives that many instances of digital currency utilisation from their end like stable coins followed by supply chain as well as capital market solutions are guaranteed in addition with bank guarantee as well as programmable money and development of digital assets. The * 15 ventures the central bank of Australia is a happy member of this collaborative opportunity for advancing their shared understanding of digital banking currency which will be primarily used by the Australian reserve Bank as the settlement mechanism for multiple digital assets purely from the domestic context (Carson et al., 2018).
Emerging Use Of Blockchain Tracking Technology
Blockchain technology is changing industries and the financial domain of Australia is implementing large variations of blockchain technology to leverage these opportunities. One of the most specific use of this technology is in connection with the supply chain management process. It is evident that majority of organisations nowadays revolutionized significance of the use of blockchain technology in financial domain. The biggest advantage of using blockchain technology in this regard is that it can become congruent with internet of things technology to help organisations achieve success. The devices based on internet of things are associated with and enable in creation of transparent as well as easily traceable ledger (Guo & Liang, 2016). This is the reason why banking corporations are emerging and leveraging the opportunities for use of blockchain technology full start the banking corporations which are hypothecated in connection with business operations of popular software development firms like IBM or major retail brands like Walmart and Amazon are especially using this technology for these purposes. The biggest evidence of this fact is the recent data that Australian banks use blockchain for tracing seven thousand kilograms of almond transfer.
The bank of Australia and where did this news. The blockchain based encrypted exchanges on global front are now used by banking corporations for reducing banking security risks. The proof of tracking the 7,000 gram of almonds is a big proof in this regard. Tracking of transfer using private blockchain on the basis of Ethereum is helping in shaping this phenomenon. Blockchain crackers are enabled using private blockchain based on Ethereum on account of which journey of substances or processing of financial transaction from end-to-end can be recorded and traced. However it is important to state in specific is that the blockchain transfers are able to trace the quality as the input and the nature of transfer (Weber et al., 2017). For evidence on the basis of the case study of almond transfer tracking it can be highlighted that the entire journey of the elements from their source in in Victoria Australia till Germany has been traced and not only them but the temperature as well as dampness and even the area and its surrounding parameters affecting the shipment has also been tracked down. Therefore if such precise adherence to functional purposes of using blockchain can be traced by than the activities can be accomplished with greater success rate and hence financial returns from such activities will be more ensured. This is the way blockchain technology can furthermore help the industrial domain by incorporating it with their financial services. Routing of blockchain technology which business activities can provide significant regions.
Why Blockchain Software Of Banks Are Taken Up By Companies
Blockchain offers transparency of data exchange and most importantly the timestamp in shares entire transferred to be stipulated. The timestamp also ensure easy access of the data associated with the transfer. On an additional note it can be highlighted that this information is easily traced and therefore networking and immunity of networking helps in avoiding attack from the hackers also. Because of these two elements of timeliness and safety associated with use of blockchain it is gradually becoming useful for organisations putting forward to deploying this technology in the supply chain management process. Blockchain encryption of the financial activities in fact other activities as well is helping organisations to ensure timely transactions and security. Australian banks are actively participating in leveraging blockchain technology. Australia announced integration of blockchain with food supply chain. Large number of innovative companies are coming up in this regard (Chang et al., 2020). The banks are initially able to add the data on the ledger. On the basis of these data the condition of the product exchange as well as the surrounding environment and other associated details can be available. After the encryption of the data into the ledger codes it is important for the organisations to add data associated with the information obtained on the same and the data regarding the condition of the product as well as environment and other usual details. It can be helpful in real time tracking of information.
Constituents Of Blockchain Crackers
Coming to block change tracking it can be highlighted that the functionalities are similar with other shipments tracking devices however there are some additional features associated with the blockchain tracker. This kind of device has a component of wi-fi followed by GPS or Bluetooth or any other battery running for three years. These aspects of operations make blockchain tracker have all necessary features which can help in a tracking of every information associated with particular consignment and it is in case (acs.org.au, (2021).
Conclusion And Recommendations
In conclusion it can be highlighted that the significance and the profitability of using blockchain technology for Australian banks has been discussed in this research study. Nevertheless blockchain technology poses significant challenges preventing Australia from completely exploiting the promised benefits from the economy as well as society. For evidence initial problem is scalability. Although security factors are more promised, yet the technical components required for analysing security of implementing blockchain technology is not evident everywhere. The amount of education required for running blockchain technology in banking operations and the concerned employment techniques are absent. Now these challenges should be treated with strategic importance by the banking operations of Australia as blockchain promise not only reduces appearing for Australian economy but rethinking business interactions within Australian society. It is important to analyse the case studies of currently implemented blockchain technologies and the failures which happened. Along with education of key factors exploring blockchain development especially the consensus of development and proper understanding of regulations of blockchain technology use is important. The speed as well as volume and scalability in addition with security of blockchain technology use should be crucial parameters for banking organisations to implement blockchain technology.
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