Use blockchain technology to prevent PNB type fraud: Expert

By Biswajit ChoudhuryNew Delhi, Feb 28 With Indian industry calling for adopting hi-tech control systems to check financial frauds, a foreign data protection expert has suggested that blockchain technology be used to prevent scams like the one unearthed in Punjab National Bank. None of these fraudulent transactions were registered on the bank's internal transaction messaging system, the Core Banking Solution, enabling the fraud to go undetected for long.While standard encryption is applicable to messages sent via the Society for Worldwide Interbank Financial Telecommunications, the system is not infallible and is vulnerable to hacking, according to Beloussov, chairman of the Russian Quantum Center, and Co-founder and Chief Executive of Acronis, a data protection multinational headquartered in Singapore. "It allows storing computer code in the blockchain that could act on any digital assets recorded on the platform, verify that specified contractual conditions are met and automatically perform or roll-back transactions with these digital assets," he added.Blockchain technology allows entrepreneurs to incorporate their businesses on a digital distributed ledger, removing intermediaries in traditional processes and reducing friction, he said. The key solutions for the banking sector are better management and operational efficiencies, use of technology such as blockchain and big data analytics, and lowering government shareholding in public sector banks," Confederation of Indian Industry President Shobana Kamineni said in a statement earlier.