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How Blockchain Technology Could Help Prevent Fraud

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Here are the ways how blockchain technology prevents fraud:

Financial frauds:  Blockchain technology helps in prevention of compliance and financial frauds.  Presently, for making payment for high-value transactions like property purchase, one has to give numerous proof and explanation for the source of income and source of funds.  But under blockchain technology tracking the money involved in a transaction is completely easy.    Usage of money for anti-social purposes can easily be checked.

Blockchain technology employs Digital contracts wherein the release of payment can be done upon satisfaction of certain conditions. For example, a buyer can set the payment to be released once goods reach the destination port.  Thus, digital contracts will put an end to delayed payments and double payments by mistake. Online frauds like getting the payment without sending the goods etc. can be eliminated using blockchain technology.

This aspect can be used in verifying the legitimacy of the supply chain in case of large companies where the supply chain would be very lengthy spreading across nations.

Identity theft:  Blockchain prevents identity theft.  Now banks have started using the most popular KYC through video call.  Hence fake documents usage is not possible.

Medical frauds:  In medical field protecting the authenticity of research data plays a crucial role.  Blockchain prevents data manipulation.  Hence medical data can be accurately maintained with ease.

Insurance frauds.  In the field of insurance blockchain technology is still in its initial stage.  But soon when this develops into a common hub for data sharing among various entities the chances of frauds can be very well reduced.

Bank frauds:  When using blockchain technology, data which is stored in the central server cannot be tampered with.  The same data can be viewed by all authorized parties who have security access to the digital ledger where transaction details are stored. Hence frauds like taking loans with two different banks based on the same security will not be possible.