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AFP 2020 Blog

How Blockchain Can Combat Fraud

Jul 13, 2020

By Dr. Sean Stein Smith, Assistant Professor, Lehman College (CUNY); Roberto Cruz, CTP, FP&A, Director, SUEZ; and Joey Ryan, CPA, CFO, Gilded

To remain relevant and deliver value to colleagues and partners, treasury and financial professionals must be knowledgeable about blockchain functionality, implementation and bigger picture implications. Our AFP 2020 session, How Blockchain and Distributed Ledgers Can Combat Fraud, lies at the intersection of blockchain, other distributed ledger tools and the potential for increased fraud and other unethical activity that these tools can prevent.

Blockchain and associated cryptoassets have moved rapidly from a conceptual or beta-testing topic to part of the mainstream treasury and financial services dialogue. Banks have incorporated them via tokenized payments, distributed ledger technology and automation of contractual payments. The importance of blockchain, the implications it has—and will continue to have on treasury and payments—is widespread and continues to be hotly debated. This session will bring a unique perspective to this conversation.


An underlying characteristic of the new normal following the COVID-19 pandemic has been the acceleration of existing technology trends. Tools and trends previously forecasted as being years away have instead been moved up to the present. A component of any rapid technological adjustment or implementation, blockchain or not, is the emergence of unethical activity. Whether it is due to information asymmetry, lack of appropriate controls, or substandard education, one of the long-lasting impacts of COVID-19 will be how organizations deal with the rapid technological changes that resulted from it.

This new paradigm will consist of at least a partial remote workforce. With all remote workforce’s accessing a multitude of third-party WIFI, fraud risk increases exponentially. Companies have already seen increased attempts, and this session will provide exposure to one of the new technologies that is emerging to help combat fraud.

Obviously COVID-19 has impacted every aspect of business, and technological innovation is no exception. Practitioners attending this session may have to be educated, and able to provide advice, on blockchain opportunities and challenges far sooner than initially anticipated. With that in mind, our session features the perspective of an experienced treasury professional, the CFO of a cryptopayments startup, and a well-known expert in the blockchain/cryptoasset space.


If we could boil down our session to one key insight or core takeaway it would be as follows. Blockchain and other distributed ledger technologies continue to experience widespread adoption and have the potential to revolutionize treasury and payments the world over. With every opportunity, however, comes challenges; treasury and financial professionals will need to educate themselves and be proactive to keep pace and prevent the misuse of these innovative tools.

There are two primary pieces of advice that we would provide to attendees seeking to create buy-in following this session. First is to highlight the bottom-line impact of blockchain, both good and bad. If an organization is late to implement, they will fall behind the competition. But if implementation occurs without proper training and education, the consequences could be far worse. Second is to educate colleagues and partner institutions on what exactly blockchain has evolved into. There remains significant amounts of outdated information that could serve as a headwind to the much-needed buy-in required.

Process optimization and preventing fraud are core to business objectives; the buy-in will be more readily accomplished by lining up the process and the benefits to the company culture and objectives. In addition, it is important to gather as much information from your financial partners to understand what technology they have readily available that can be leveraged. This will provide a ready product that involves minimal IT support and is easily deployable. In short, leverage existing relationships to see what existing/new products are available.

Don’t miss How Blockchain and Distributed Ledgers Can Combat Fraud, which is part of the payments track at AFP 2020. Register for AFP 2020 here.