Blockchain applications in Banking with a focus on GCC Banks


There is a new technology on the block. The technology will disrupt the hegemony of traditional business processes. The technology will eliminate the middlemen and is decentralised. How will this technology disrupt Banking?

Blockchain is a decentralised ledger (DCL) which can record transactions and store transactions. Since it is a DCL, to change a record the hacker would need a computing power of all the computers or nodes in the system. This makes the data very trustworthy.

IBM, Cisco, Infosys have enabled banks to test out Blockchain for their pilots. 80 Banks around the world are part of a consortium called R3. R3 aims to develop a robust blockchain applications for Banks. The Global Blockchain Council is also looking at ways to harness the power of the Blockchain for the larger good.

Some of the cases where Blockchain could help the financial services industry are

1. Trade Finance –

Financing as become an integral part of trading operations. Trading involves lot of paper work and due diligence. A single transaction involves lending, issuing LOC, factoring, export credit issuance, and insurance. A smart contract would authenticate all the properties to facilitate a frictionless trade. Deloitte recently published a paper where trade financing is touted to be one of most promising sector for Blockchain applications.

2. Remittances

GCC region has a significant number of migrants who have moved to these countries for a higher pay. They send money back to the home frequently. Though money transfers via swift messaging is quick, The costs are high. As per a Moody’s report the cost of cross border remittances could be come down by almost 50% with Blockchain. Migrant workers amount to high proportion of low value transaction. UAE accounts for more than $19 billion of remittances per year, ranking it fourth in the world, according to World Bank data.

3. Back office compliance and reconciliations.

Back office works is a big part of banking activity. Regulation and compliance issues leads to lot of checks and counter checks. Immutability of data in the blockchain makes it trust worthy. United Arab Emirates wants to become the first government to execute all of its payment on the blockchain by 2020 plan .

Blockchain applications In GCC Banks

With ADGM and DIFC issuing regulations to govern the fast growing Fin-tech sector. Banks in UAE have been on the fast track to implement blockchain technology.

National Bank of Abu Dhabi has become the first bank in MENA region to introduce real time, cross-border payments on blockchain. The bank has formed a partnership with Ripple.

India’s largest private bank, ICICI, and one of the middle east’s largest banks, Emirates NBD, announced international blockchain transactions for Trade Finance and Remittance. Read more

UAE-based Rakbank and Axis Bank in India have partnered to send live payments.

Saudi Arabia central bank has recently signed a deal with Ripple for a pilot project.

Qatar’s Commericial Bank announced its successful money transfer pilot by using a blockchain developed by a subsidy of Indian IT firm Infosys.

Future scenario

It is too early to see widespread use of blockchain technology in the banking sector. The complexity of how regulations will evolve around it is not clear. There are serious questions about scalability also.

Do you have any hands-on experience working with Blockchain applications? Get in touch with me via email.


About the author

Financial advisor to UHNWI, private entities, family offices, and companies. Certified Anti-Corruption Manager from The American Anti-Corruption Institute

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