Blockchain-Based Solution for Non-Banking Financial Companies

Abstract

The factors of increased and spreading influence these entities have about financial inclusion bring out and bring to the forefront the critical necessity for developing innovative and creative solutions that might work effectively towards solving a variety of operational challenges posed by Non-Banking Financial Companies, known as NBFCs. Blockchain technology, in the advent of time, holds the potential of revolutionizing the operations and services by NBFCs, mainly due to their inherently decentralized nature, robust security features, and transparency. This research effort goes deep into blockchain-based solutions specifically aimed at tackling the unique requirements and needs of the operations of NBFCs, such as crucial credit evaluation, the risk management practices, and the workflows of loan processing. Smart contracts can be used by NBFCs to automate processes, reduce operational costs, and increase trust among stakeholders. In addition, the immutability of blockchain records can ensure regulatory compliance while reducing the risk of fraud. Blockchain can potentially enhance data privacy, expedite transactions, and streamline access to financial services from a customer perspective. It allows regulators to monitor the financial system in real time and enhance its stability. This multi-disciplinary analysis gives an overall understanding of how blockchain technology can help NBFCs enhance operational efficiency, customer centrality, and resilience in a changing financial environment that could facilitate sustainable economic growth.