July 26, 2021 4:57 PM

New blockchain and anti-financial crime solutions for banking revealed

With the pace of financial negotiations and transactions constantly escalating, CGI is introducing solutions for global business using blockchain and one-stop platforms.

/ Published 3 years ago

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CGI, an international management and technology consultancy headquartered in Montréal, announced new products and initiatives for the banking industry. Collaborating with the National Bank of Canada and Skuchain, CGI piloted a blockchain solution featuring smart contracts to complete negotiations for standby letters of credit and guarantees. CGI also announced HotScan360, a platform that scans and scores thousands of financial transactions per second. The platform complies with a wide range of instant payment regulations.

Guarantee and standby negotiation on the blockchain

CGI (TSX:GIB.A) and National Bank of Canada (TSX:NA) piloted a blockchain-based guarantee and standby negotiation platform intended to streamline the complex process of negotiating conditional agreements for securing financial transactions. These negotiations typically take place via email leading to mistakes and delays in a process that lacks transparency.

The platform uses smart contracts to transparently record agreements and changes on a blockchain. Using Skuchain’s Contract Builder, a blockchain-enabled platform for smart contracts, and the CGI Trade360 trade finance platform, the system enables negotiations of standby letters of credit and guarantees. The result is a quicker, more secure and largely transparent process recorded on a shared digital ledger.

CGI’s Nancy Amert, who has been working with blockchain-related projects since 2016, points to three key properties of blockchain that reveal why such a solution was chosen for guarantee and standby negotiation: Disintermediation of trust; immutability of the record; and the logic of the smart contract.

Blockchain’s shared, distributed ledger addresses both issues of trust and immutability. All parties have transparent access to the ledger and cryptography is used to create an immutable record of all transactions.

Amert describes smart contracts as “if-then statements” that execute agreements once specific conditions are met. If what is agreed upon occurs then execution follows, an incredible time-saver especially when replicating processes.

CGI is pursuing projects and research using blockchain solutions from numerous directions including financial and governmental use. They are also considering ways to address the outsize energy consumption of operating blockchains.

Single solution for managing transactions

CGI also announced the availability of CGI HotScan360 building on their widely used HotScan financial transaction solution which is operating in 40 countries settling over US$5 trillion in daily payments. Using a risk engine powered by machine-learning, HotScan360 operates in real-time and evaluates financial transactions in milliseconds. The platform is designed to be a one-stop solution for managing and evaluating real-time financial transactions for risk and compliance.

banking
Safes cannot protect against cyber crime. (Source)

HotScan360 is automated and built with a modular framework that allows integration with other systems as needed. This capability is a key aspect of making HotScan360 a truly one-stop solution.

In addition, HotScan360 complies with such regulations as PSD2, GDPR and SEPA instant payment requirements in both current and future forms. Such anti-financial crime regulation compliance is key to enabling real-time financial transactions on a global basis.

In discussing anti-financial crime solutions, CGI’s Jan Macek pointed to the necessity of a single, end-to-end system to address anti-money laundering, fraud detection, and customer due diligence. He maintains that any such solution should include features like “real-time monitoring, big data analysis, machine learning, cloud hosting and regulatory compliance” that enable “effective risk mitigation and operational excellence.”

Such systems should also be forward-thinking with the ability to integrate new regulations and to reveal new forms of financial crime. With overwhelming amounts of daily transactions, cyber criminals have many opportunities to innovate and quickly apply new tactics globally. Financial institutions need tools that allow them to address customer needs, governmental requirements and criminal challenges and HotScan360 is CGI’s attempt to address that need.

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