Writing Sample #1
Singaporean Startup Uses Blockchain Algorithm to Improve Record Keeping In Trade Financing
The world’s financial sector is looking towards blockchain, the main technology that drives Bitcoin, to solve fraud and security issues. The technology has proven to be beneficial in improving security, transparency, and the efficiency of financial transactions.
Big players in other industries have started using blockchain algorithms for applications that are not necessarily financial in nature. Startups in Singapore have not been left behind. In fact, they are pioneering the use of the technology in areas such as insurance, finance, and record keeping, to reduce fraud and bottlenecks.
Open Trade Docs
One of the Singaporean startups using the blockchain based technology is Open Trade Docs. OTDocs uses an algorithm to create digital versions of existing paper documents. The digitized versions are then stored securely and are accessible to all designated members of the system.
According to OTDocs, when business use conventional sharing systems, they have to send the records to third parties. The use of third parties can increase the overall cost of storing records. Additionally, there are risks such as information leaks and fraud that are not adequately addressed using a centralized system.
OTDocs system can track record duplicates while reconciling non-editable documents. It achieves by combining the blockchain algorithm and the institutions centralized system of records. The company has also incorporated its own fuzzy logic algorithm that can detect duplicates without revealing documents to any outside entity. This will make financial systems faster and more effective and add an extra layer of security.
Integration with Other Systems
OTDocs provides a blockchain solution that increases the level of security and avoids tampering of records. The decentralized approach also gives businesses more power over the information they choose to share with stakeholders.
They have created an API-based solution to allow businesses to integrate OTDocs with existing systems. Using a messaging module, users can transfer rich text and multi-media messages securely, incorporating it with preexisting in-house systems.
Addressing Challenges
One of the challenges of blockchain technology is that there are limitations to crowd sourcing thanks to perceived trust by financial institutions. Bitcoin’s system integrity is upheld by thousands of validators from all over the world. Financial institutions feel uneasy having anonymous validators maintaining the integrity of the system.
One of OTDocs vantage points is that it has on-shore validators to ensure the system maintains the highest level of integrity. This maintains positive perceptions of the technology and ease of regulation compliance. Financial institutions are more likely to be confident in the system if it is run locally. Compliance to local regulation is easier for the company offering the service when running their entire system locally.
OTDocs was founded in 2015. The company currently provides solutions to international trade finance institutions. The startup believes that this blockchain based technology could reduce incidences of fraudulent money transfers in developing countries. In 2014, there was close to $1 billion USD siphoned out of developing countries through trade finance, despite the fact that banking institutions have been increasing controls and tightening compliance. OTDocs is committed to using emerging technologies to protect financial assets.