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AMWeb, The Netherlands: Cognizant’s AVP of Banking & Financial Services Consulting in Benelux Says Blockchain’s Secure and Resilient Architecture Protects Against Powerful Attacks

“So much emphasis is now placed on our world being digitized, from our social interactions to how we browse and purchase items, to capturing our experiences via live streaming apps and photo-sharing sites to mention just a few,” says Joris van Dongen. “It was only a matter of time until money also went digital.” Excerpts:

“Crucially, the technology that underpins Bitcoin, Blockchain, has the potential to transform centuries old mechanisms for transferring money.

Blockchain is the technology that enables cryptocurrencies and is built on the principles drawn from cryptography, game theory and peer-to-peer networking. This allows any unique monetary data exchange to get past the problem of double-spend by making the ledger (the book of record) available to all participants in the network and by creating a process by which a consensus can be reached in changes to the ledger.

Due to the fact that “it is hard to fool”, Blockchain technology makes fraud more difficult and could speed up trading systems and make deals more transparent.

Beyond the security implications and increased transparency of transactions to all parties involved, whether institutions or customers, it can have a beneficial impact on pricing and costs in the market, along with the opportunity for more accurate tracking of customer repayment histories reducing the risk of defaulters.

It is essential that any financial services business works to develop specific use cases to understand how the technology could support their organization. These types of test beds are already being developed around the world.

Using Blockchain-based networks to revamp financial institutions’ internal architecture as well as a number of additional factors need to be considered. These include the bank’s strategy to own the infrastructure, their payments strategy, specific regulations to be defined by central banks and supervisors, their openness to partner with other entities and, importantly, their internal policies on risk management.

This decision-making process is both an opportunity and a barrier unless explored in more detail. It is essential that businesses in all industries understand how, when and why the currency is seeing such traction, what it means for their business and the broader economy.”

Click here to read the article in Dutch.

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