Emirates NBD, the biggest bank in Dubai has become the first bank worldwide to use blockchain technology to combat cheque-related fraud.
With the aim of strengthening security standards in the banking sector, Emirates NBD announced the roll-out of an innovative blockchain-based project called “Cheque Chain.” As per the new system, a QR code is printed in every cheque leaf, issued by Emirates NBD and subsequently recorded in the blockchain-powered platform. A pilot phase was launched last year and the new cheque books were given to their own employees to assess the technology. Based on the immense success of the pilot batch, these cheques will be deployed to customers all over the country.
Although forging cheques is not as easy as it used to be before, frauds still do occur on a regular basis. The benefits of adopting a blockchain-based system are that bank employees can easily verify the authenticity of the cheque. It also allows the bank to validate a cheque’s authenticity at all times, even after the cheque is received and cleared.
The bank’s Chief Operating Officer (COO) Abdulla Qassem stated: “This initiative will significantly strengthen our risk and security management processes, particularly through the reduction of cheque fraud.”
This marks the official recognition of the benefits of blockchain technology to the banking sector. The retail banking giants plans for innovation do not stop here. The bank has an expressed its interest towards opening up Cheque Chain’s technology to other influential UAE institutions in the financial sector with the aim of facilitating collaboration. Emirates NBD’s blockchain project coincides with the Dubai Blockchain Strategy, an government initiative that is aimed at seeing all government documents on a blockchain by 2020.
“[I]n exploring the potential of blockchain technology, we are delighted to be the first bank in the country to utilize this remarkable new technology to strengthen and upgrade our internal processes,” stated Emirates NBD Group CEO Abdulla Qassem.
Dubai is one amongst the several countries that embraced block-chain technology in its early days. Previously, Dubai has implemented unique block-chain based solutions in industries such as automobile and tourism. Only time will tell if expanding the application of blockchain into the banking sector is another step in the right direction for technological innovation.