Leveraging Blockchain Technology …

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ing centralized ledger systems where personal and financial data related to customers

are stored has been the target of hackers and fraudsters. Banking frauds related to

technology-based services in the retail banking arena include identity theft, fraud in

documentation, e-banking (related to debit card and credit card) theft, multiple fund-

ing, Card Not Present (CNP), incorrect sanctions, internet banking fraud, and ATM

fraud. Corporate banking frauds are in terms of asset stripping, siphoning of funds,

diversion of funds, frauds in documentation, over-valuation of collaterals, and non-

existence of collaterals. The most recent addition to this list of frauds is where the core

banking system is compromised. When Society for Worldwide Interbank Financial

Telecommunications (SWIFT) [31], which is the payment processing system is com-

promised, the fraudsters gain the advantage of arbitrarily transferring funds to remote

accounts since SWIFT is the gateway that allows fund transfer to connected financial

institutions. The ever-growing number of payment systems currently available in the

market place also multiplies the risk of frauds associated with it. However, the spike

in the number of frauds over the years is more in retail banking as it is process and

volume-based compared to corporate banking. The limited availability of resources

in terms of human resources and technology to monitor the processes, verifying

the documents, and incomplete customer information has made banks vulnerable to

fraudsters. Figure8 depicts a BCT-based credit report management system.

Figure9 projects the sheer increase in value of payments and clearing transactions

of the growing Indian economy through the years 2017–18–2019–20. The payment

and settlement systems captured a robust growth rate in 2019–20, expanding by 44.1

per cent in volumes on top of the growth by 55.8% in the year 2018–19. In value

terms, the increase is by 5.4% when compared to 14.2% of the previous year due

to reduced growth in the Real Time Gross Settlement (RTGS) system. During the

year 2019–20, the portion of digital transactions as a part of the total non-cash retail

payments increased to 97% as compared to 95.4% in 2018–19. However, the digital

transactions were hard hit due to the ongoing COVID—19 pandemic that caused a

downturn in the economic activity and lowered discretionary payments [32]. At the

global level the total payments revenue stood at $1.9 trillion in the year 2018[33]. On

the other hand, bank frauds too rose substantially. The annual report of Reserve Bank

of India (RBI) reveals that the bank frauds of rupees one lakh and above amounted

to 71,543 crore in 2018–19 while it stood at 1.85 trillion in the year 2019–20 with a

whooping 159% increase. In terms of volume, the total fraud increased from 6,799

in 2018–19 to 8,707 in 2019–20 registering a 28% increase [32]. As evident from

the above-stated figures, as banks move toward embracing emerging technologies

like IoT in their everyday transactions, the cases of bank frauds are also increasing.

One of the effective preventive mechanisms the banking industry can look up to is

blockchain technology. If IoT is intertwined with BCT, these fraudulent activities

can be significantly reduced and the sensitive data can be guarded diligently. BCT

enables a decentralized storage mechanism and puts a consensus mechanism in place,

which will prevent hackers from gaining effortless access to the stored information.

The process of Smart contracts also ensures the safety and accuracy of transactions

since each of the previous steps of a transaction is linked with the consecutive step