The global economy is humming along. Businesses are adding jobs, wages are increasing, and the stock market is continually achieving new record highs. Even so, risks remain prevalent.

A study conducted by Risk.net found that fraud is one of the top risks for businesses. Fraud is increasing in almost every category, and according to the report, it “generally results in operational losses.” Globally, those operational losses total nearly $4 trillion each year.

Fraud isn’t just bad for the bottom line. It’s also bad for people. The losses accumulated as a result of fraud drive up costs for consumers, and, in some cases, the risks associated with the fraudulent activity are even worse than the legal consequences.

Moreover, it’s a difficult problem to solve. Company policies are easy to subvert, and many don’t have the resources to address the problem adequately.

The blockchain, the incredibly capable technology that powers popular cryptocurrencies like Bitcoin, is one novel solution that stands ready to make an impact in fraud prevention. Other articles have already examined the technical reasons that blockchain is so good at fraud protection.

Therefore, let’s look at some of the ways that companies or even entire industries are using blockchain to reduce instances of fraud.

Preventing Prescription Drug Abuse

The opioid epidemic is described as “the deadliest drug crisis in American history.” The opioid crisis is predicated on prescription drug abuse, which is a complicated problem that involves over-prescribing patients with painkillers, the illicit prescription drug trade, and fraud.

At least on a technical level, the blockchain is prepared to help solve this crisis. Healthcare ICOs like BlockMedX are providing a platform for physicians and pharmacies. The blockchain allows physicians to securely prescribe patients with medicine while also creating an unchangeable record that can spot possible abuse or misuse of these powerful drugs.

By improving the technology that doctors and pharmacies use to prescribe and distributed prescriptions, the blockchain can better ensure that the right medicines are going to the right people. While this only accounts for the technological aspect, it’s a move in the right direction.

Eliminating Fraudulent Insurance Claims

Each year, people file millions of insurance claims. For most people, their insurance is a financial lifesaver that prevents a single event from becoming a total tragedy that encompasses their entire lives.

Unfortunately, a certain amount of people will also try and buck the system by submitting fraudulent or redundant insurance claims. By storing customer information and claim submissions on the blockchain, insurance companies can reduce instances of insurance fraud. Deloitte, a consulting firm that studies the blockchain, notes that it would “certainly make it much harder for criminals to mask their identities or attempt to claim more than once.”

InsureX was the first insurance related ICO to launch in 2017, and ICO Alert documented dozens of blockchain startups that are striving to fill this demand.

Protecting Financial Transactions

For financial institutions, fraud is an exceptionally expensive threat. This is especially true for bank-to-bank transactions, which are particularly vulnerable to fraud because of the hands-off approach to these transactions. According to a study by IBM, “payment fraud is a $20 billion-a-year problem.”

That’s an expensive problem, and the blockchain is ready to intercede. By lessening a transactions settlement times, and by creating an immutable, verifiable record that can only be updated if all preconditions are met, the blockchain can help reduce the amount of money lost to fraud.

Several major financial institutions including JP Morgan Chase, CME Group, and Mastercard have signed on to the Enterprise Ethereum Alliance, a collective conducting blockchain research for implementation across different sectors.

Maintaining the Supply Chain

In a globalized economy, supply chains are complicated endeavors that include multiple handoffs and time-sensitive transportation. Along the way, there are plenty of opportunities for fraud, and thieves are taking advantage of those opportunities.

The blockchain and its accompanying smart contracts allow for real-time item tracking, and they produce an unchangeable ledger of item handoffs. In short, the blockchain provides supply chain managers with all the information that they need to ensure that their items are not being stolen or misreported.

Founded in 2015, Everledger is a blockchain-based supply change management system that tracks expensive items as they move through the supply chain. By using the blockchain to track luxury items like diamonds, Everledger can guarantee their ethical sourcing, their safe transportation, and their authentic distribution. This process has broad implications across the supply chain ecosystem.

Of course, the blockchain is merely a technology, albeit a powerful and effective one. However, it cannot solve all the problems associated with fraud, and it would be unwise to depend exclusively on technology to solve a fundamentally human problem. But it can make a big difference, and it’s already doing so in several major industries.

Bitcoin News

TheBitcoinNews.com – Bitcoin News source since June 2011 –

Virtual currency is not legal tender, is not backed by the government, and accounts and value balances are not subject to consumer protections. TheBitcoinNews.com holds several Cryptocurrencies, and this information does NOT constitute investment advice or an offer to invest.

Everything on this website can be seen as Advertisment and most comes from Press Releases, TheBitcoinNews.com is is not responsible for any of the content of or from external sites and feeds. Sponsored posts are always flagged as this, guest posts, guest articles and PRs are most time but NOT always flagged as this. Expert opinions and Price predictions are not supported by us and comes up from 3th part websites.

Advertise with us : Advertise