UAE retail banking giant Emirates NBD will introduce blockchain technology into cheques to minimize fraud and strengthen their authenticity.
Announced this week, the banking group has launched the pilot phase of its initiative titled ‘Cheque Chain’. According to the bank, the ‘initiative is the beginning of a significant strategy by Emirates NBD to integrate blockchain technology into existing products and services.’
This sweeping adoption of blockchain technology, the bank adds, is to implement the best digital security systems available. Blockchain technology enables an immutable timestamped record of data stored on a decentralized ledger that can be accessed by multiple participants at the same time. The technology does not rely on a single central database, negating fears of a single point of failure and altogether making for a quantum leap in digitized security.
“In 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.
Cheques over a Blockchain
The initial phase of the initiative will see unique QR (Quick Response) codes on every leaflet of a cheque book which immediately makes it harder to forge cheques. Subsequently, the QR code will register every cheque on to the bank’s blockchain .
This allows the bank to validate the cheque’s authenticity at all times, with access to its source even after the cheque is received and cleared.
While details remain scarce, the banking group’s chief executive added:
Cheque Chain will bring an added layer of security to our cheque clearing system, and ensure that each cheque issued will be verified under the bank’s system with its own unique QR code providing significant improvement in cheque security.
In its pilot phase, the bank will push the new cheque books on to its own employhees to assess the technology. A customer rollout will follow later this year.
The effort follows another notable endeavor by the Bank of Tokyo-Mitsubishi UFJ, Japan’s largest bank, which is also testing digitized checks on a blockchain.
In October last year, Emirates NBD became the first UAE private sector bank to trial blockchain-based real-time international money transfer and trade finance transactions with Indian partner bank ICICI. The first transaction aimed for a low-cost, near-instant international remittance transaction. The second, facilitated an international trade finance transaction to import shredded steel melting scrap from Dubai to Mumbai, India. Both pilots proved successful.
Emirates NBD is quick to point out that it is a member of the Dubai Future Foundation’s Global Blockchain Council, which launched in February 2016. Dubai’s largest bank adds that its binge coincides with the Dubai Blockchain Strategy, an sweeping initiative that began with the government’s announcement to see all of its documents on a blockchain by the year 2020.