CROWD2FUND founder Chris Hancock has launched FinBlocks, a new blockchain-based payment system that is aiming to tackle identity fraud online.
The new software as a service (SaaS) product is already being used by peer-to-peer business lender Crowd2Fund, to provide payment, client money handling, virtual wallets and enhanced compliance services, utilising blockchain technology.
FinBlocks will initially be targeting other UK fintech firms looking to enhance their payments system, before looking outside of financial services to other types of companies such as those in the social media space.
FinBlocks was founded in March 2018 and raised £300,000 in seed funding from angel investors in August that year. It launched in July 2019, having been under development ‘in stealth mode’ for more than a year, by a team of engineers and architects in the UK, with further support from external teams in Sydney and Cape Town.
Built to be compatible with blockchain technology, the services offered by the SaaS system will be conducted transparently on a public blockchain.
This enables regulators – and potentially central banks – to gain full visibility of transactions, resulting in better auditing, reporting and compliance monitoring, FinBlocks said.
“The system was born out of a need in the market to develop a fully regulated, secure, blockchain-based payment system,” said Hancock.
“Using blockchain can really bring some amazing benefits because of the way the data is recorded within the system. We’re looking forward to continuing the development and perhaps providing deposit services for consumer clients in the future.”
The global payments market is valued at $2.9trn (£2.3trn), according to a 2018 report from consultancy firm McKinsey. Meanwhile, research from fraud prevention service Cifas found that identity fraud in the UK hit an all-time high of 174,523 cases in 2018, with eight out of 10 of those fraudulent applications made online.
FinBlocks argues that this shows there is a need for new payment systems that have security and compliance at their core, to tackle the “huge and growing problem” of online fraud.