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Analysis of impact and issues of block chain technology on intelligent cross-border transaction system

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Report Title - Analysis of impact and issues of block chain technology on intelligent cross-border transaction system

Extended Abstract

Now a day, cross border transactions has been become more and more popular around the world. However, the transactions done across the cross borders still have the various risks and challenges. It may be due to the variations in the regulation policies and it needs to be addressed. To address these issues, the new framework needs to be constructed for the transaction system with assistance of the block chain technology. And there are some pain points exist in the cross border payments such as transaction cost, speed and opacity. Foe each step in the cross border payments, fees starts to accumulate and for high volume payments, the charge may get double up. The tracking of the payments while it is in transit is essential but it is not possible during the cross border payments and it will introduce the uncertainty about the final payment and schedule delivery process. It also becomes tedious to track of the transaction issues such as incorrect account number. The advent of the block chain technology nullifies those issues by reduction of expensive payments made during the transactions by elimination of need of intermediaries. It has been revealed that the firm can be able to save the 40% amount with usage of the block chain platforms. And some other benefits added by the block chain such as secured payments due to the existence of the effective cryptographic mechanisms. The higher transparency and visibility acquired by means of blockchain technology. Though blockchain adds benefits, the security attack made on the block of data will affect the entire functionality. Thus security consideration of the blockchain is significant to make use of whole benefits of blockchain technology.

Introduction

The significance of implication of the blockchain technology in the cross border transaction can be studied in this section and impact level of this technology also determined. The challenges in usage of the blockchain technology were studied and provide research direction to undergo further study in this chosen field (Zhengtang, 2021).

Scope, context and significance of the research

The significance of this respective work includes gathering of the various works and analysis of some of the work done by the author made. The adoption of the various research methodology can brought the idea of making the effective research solution by combating the security flaws found in the blockchain technology. The context of conducting the research is to predict the weakness in applying the blockchain technology for processing the data. The application of the research methodology can made the transaction to be recorded with hashing mechanism by means of blockchain mechanism.

Background information

The boom of economic globalization plays a major role in the cross border transactions. The various issues need to be considered in this trading scenario such as exchange of currency, government regulations and safety during the transactions etc. Even though there is various third party transaction tools exist, there are various concerns such as trustable data sharing and government regulation were found still challenging. This traditional cross border payment system hinders the business international process and causes lot of time wastage. And also cash flow activity was made slower in between the two nodes. And this may due to sequence transaction process such as handling of the transactions by the international banks and overseas and local bank transfer process. Besides, transaction cost also found to be quite high. Therefore, an intelligent transaction system must be introduced in order to fulfill this gap. Driven by these issues, the creation of new cross border transaction can be able to renovate the traditional method (Deng, 2021). Due to the various technological developments, various advanced technologies needs to be created in order to made the transactions in convenient manner. Cross border ecommerce is the business activity that is analyzed with the transaction based on the e-commerce platform. The growth rate is provided with the network performance key management that is developed and expected with the transport goods that is completed with the cross border application. The blockchain technology is widespread with the internet economy that is made with the application driven architecture based on innovative technique that is permeated with the digital currency applications.

After the various analyses, blockchain technology found as effective solution to aid the cross border transaction process. The implementation of the blockchain technology has made the cross border payment activity to be carried out in smarter and easier way. The blocks present will keep record of every transaction data such as address of the payer and payee, transaction, and timestamp. The hashing value will be generated with hashing value and thus attaining the high range of integrity to the data that are preserved (Frizzo, 2020).

Purpose of work

The ultimate goal of the respective research such as making the secured financial transaction by means of decentralization concept. The research done can help the researcher can help to transfer the data in secured manner and thus the data can be transacted in secure manner. It is challenging to comprehend the adopted technology such as blockchain and to identify the innovations made in the cross border payments (Usman, 2021). The filling of the gaps done by the discussion of significance of the blockchain technology and assessment of importance of blockchain technology in the secured transactions (Biswas, 2019).

Research problem

There are many problems that are associated with the traditional cross border payment system and it needs some of the effective solution that needs to be taken into account. Now a day, most of the payment activities occurs via online and thus the banking channel has to undergo the intermediary institutions which have interdependent accounting system. The recording of the bank details also needs clearing and reconciliation process with the other third parties at same time and it is time consuming process (Cole, 2020). Secondary problem such as high cost which means making the cross border payment needs to undergo various formalities and thus it significantly increases the transaction costs. Finally, the low security is one of the major concerns in this traditional cross border payment system as it uses the centralized payment system (Hongmei, 2021). The customer has to provide the account details and other data to the intermediaries and other withdrawals on the basis of the data that are provided by the customers. Under this payment model, the accumulation of the customer account data and transaction data occurs and it becomes primary target for the hackers and criminals to steal the data. If a third party company employed for performing the cross border payments, they needs to access the transaction data. The transaction data will include personal data, authentication data and transaction records. Because the services that are provided by the third party cross border payment has to provide the services via network involving overseas merchants, consumers, third party payment platforms and financial companies and thus any problems emerge in theses links will certainly causes leakage of the data. There are various bottlenecks that exist with the blockchain technology also such as higher degree of decentralization may leads to lowered consensus efficiency mechanism. And higher the rate of decentralization may longer the delay in the transaction process (Dash, 2017).

Methodological approach

The adoption of the blockchain technology can provide the secured cross border payment activity but the concerns in adoption of the blockchain need to be addressed. Some of the familiar concepts utilized exist in the blockchain has been explored below (Deng Q. , 2020):

Decentralization

It is one of the essential features of the blockchain technology and design of the blockchain was made on the basis of this idea (Kshetri, 2020)In a blockchain network, the exchange of the data between the nodes refers to point to point transaction method. This model resolve one of the major issues exist in the traditional centralized model which has over dependency on the third parties. The center also violates the information asymmetry which is one of the major issues in the financial field. The employment of the point to point interaction model can simplifies the transaction process (Selvaraj, 2019).

Immutable and traceability

It is basic feature of the blockchain and technologies such as merkle tree and timestamps gets encapsulated into the blockchain in order to ensure the data reversibility of the information exist on the chain and thus assuring the data security. (Naz, 2019)

Efficient Intelligence

It is one of the efficient features of the blockchain technology and it shows that it cannot be traced back at any cost. The blockchain employs consensus based mechanism and protocols to enable every nodes in the system to exchange the data in free and secured manner. The higher efficiency of the process made the intervention of the human ineffective by means of entire transition to intelligence anatomy (Liao, 2021).

Potential outcomes

The potential outcomes carry out this corresponding research work such as trust between the multiple companies gets improvised with the adoption of the blockchain technology and trust machine can be built in between the customers and companies (Nguyen, 2018). The transaction was carried out as per the government regulation and thus the effective data transfer made. The governance and standardization of the payment process can be made successful after adoption of the blockchain technology. The continuous monitoring and verification of the members can made the transaction process to be carried out in secured way (Xingxiong, 2019)The data transaction process can improvise the security policies that are applied between the various third parties and there will not be any need to depend on the third parties. The advancement made in the cross-border payments can bring secured data transactions and thus the security and privacy issues cannot be eliminated (Gurkaynak, 2018). From a technological perspective (Schweizer, 2019), the governance and computational procedures can be followed to make the transactions in secured way. Intelligent system is addressed with the cross border transaction that is analyzed with the use of blockchain technology that is explored with the current research. This blockchain technology is explored with the various borders that are constructed with the transaction system. The different parameters like transaction cost and speed were considered with the regularized policies that are analyzed with the intelligent transaction (Lu, 2018).

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