Ripple, the blockchain based fintech services platform, has announced new developments that can protect banks from hacking incidents. The development comes amidst growing thefts against multiple banks across the world.
Ripple’s solution for secure transactions involves the introduction of multi-sign feature to the Ripple Consensus Ledger. The thefts were conducted by hackers who gained unauthorized access to the banks computers and used these compromised systems to transfer funds from the banks to offshore accounts. The funds were transmitted over the inter-bank transaction network – SWIFT.
By implementing the Ripple Consensus Ledger with a multi-sign feature, the banks will be able to have more control over cross-border fund transfers. The multi-sign feature will make it compulsory for those initiating bank transfers to gain authorization from multiple parties before it can be executed. Apart from maintaining accountability, the multi-sign feature will also add additional burden on the hackers as they would have to break into multiple systems in order to authorize fund transfer from the bank to their accounts.
Among the banks that lost funds due to the vulnerability in SWIFT Network includes the Central Bank of Bangladesh, as well as banks in Vietnam, Ecuador and Ukraine.
“The bank heists in Bangladesh and around the world have demonstrated that the weaknesses that exist today at the periphery of payment networks are partly due to outdated single signature methods,” Ripple stated.
“The new features found in distributed fintech solutions, such as multi-signing, are not available in traditional systems like Swift’s. Blockchain technology delivers a more robust and distributed security architecture for banks.”
While multi-signing is already in place in few aspects of conventional banking, but with the Ripple Consensus Protocol, these multi-sign rules will be enforced by a third party (the protocol) instead of the bank itself. This may well be a game changer for both the banks and Ripple, as the partnerships between both parties will allow banks to have additional security, while ensuring further expansion for Ripple.