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Credit managers over the decades have looked into the finance inventory of customers to assess credit risk during lending, says Edward Boyle, the Chief Executive Officer of Medici Bank in his recent podcast with Dave Schmidt and Robert(Bob) Shultz from Highako.
The process became cumbersome when they began lending across the globe. With the involvement of multiple financial institutions, there was no real-time visibility into the funds. This gave rise to the most historical question ‘Where is the money?’
To deal with these complications, banks introduced a tokenized future for credit managers.
What is Tokenization? Tokenization is a generalized concept of a cryptographic hash. It means representing something by a symbol ‘token’. For instance, your customer’s assets will be tokenized and put on the distributor’s(Your) ledger. Once this is done, your customer cannot borrow collateral against that asset.
With the onset of Tokenization, the age-old batch system of tracking goods and money collapsed. Why? Because the former gave real-time visibility to the sender and receiver for tracing accounts receivable.
The new era of tokenization marked 50% less guilt-free risk assessment. Best of all, businesses reap all these benefits today.
- Protects businesses from the negative financial impacts of terrorism and money laundering.\Fosters trust with customers
- Achieves and maintains compliance with industry regulations
- Drives efficient payment innovations
- Reduces payment cycle time from 2 to 3 days to 2 to 3 minutes
Hear from Lorenzo de’ Co-Founder, Medici Bank how adapting tokenization could mitigate financial risks by real-time effective decision-making processes resulting in increased company’s profit.
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