Emirates National Bank of Dubai (NBD), one of the leading banking groups in the Middle East, has partnered with The Central Bank of the United Arab Emirates (UAE) on a blockchain project intended to combat fraud.
The UAE Central Bank should be very familiar with blockchain tech due to Dubai’s general push for the widespread adoption of disruptive technologies. This isn’t Emirates NBD’s first rodeo, either. The group tested the blockchain waters last year, researching blockchain tech for payment applications, and is also part of the blockchain-based R&D efforts undertaken by the Dubaian government.
Emirates NBD’s CIO, Ali Sajwani, spoke of blockchain technology’s viability and how real-world use case testing has revealed key insights that have only furthered development efforts. The two entities are now looking to use the technology to secure low-tech paper checks. Sajwani said:
"We are currently working with the central bank of the UAE to add the blockchain security feature to our paper cheques, so we can prove that the technology is fit for purpose at production volumes. We are very excited at this prospect and we welcome the cooperation of other banks and institutions in developing the use case into not only a new standard for cheques but also to develop best practices that we can apply in other use cases."
There have been recent reports in the UAE of scammers impersonating bank officials. These scammers make themselves appear authentic, meet with their victim, and ask for a signed but blank check. Here’s where the scam gets smart: the fake “banker” fills out the victim’s check, right there in front of them, so they’re confident in the legitimacy of the interaction. The problem is the scammer uses their own “magic pen,” which has erasable ink. They later alter the check to read whatever they want (changing the beneficiary and the amount) and use a third party to cash it.
This is why Emirates NBD is planning to use its blockchain technology to secure checks. In the concept system, a check’s beneficiary and their bank could confirm the validity of the check, using blockchain technology to create an unforgeable ledger for verification purposes. This is yet another example of how a high-tech blockchain-based system can be used to secure more traditional, low-tech forms of transacting. This combining of old and new methods is integral to fostering the adoption of secure, efficient financial technologies.