The Effect of Blockchain Solutions on Credit Risk Control Systems of Banks

Credit loans are one of the main incomes of commercial banks. For a long time, the bank’s risk control department and technical department have been constantly looking for more optimized credit risk control solutions and tried to introduce emerging technologies into the credit risk control system. However, the current credit risk control system still has problems in accuracy and authenticity. For example, banks cannot accurately assess the credit rating of the loan company, cannot accurately assess the loan amount, cannot ensure the authenticity of the information, and cannot accurately track the final flow of loans. Blockchain technology with traceability, immutability, and multi-party trust mechanism will be a solution. In this study, qualitative data collection was conducted through interviews and company documents and recorded secondary data to analyze the existing problems of credit risk control and how to use the advantages of blockchain to solve these problems. Results showed that blockchain technology can well solve the problems in credit risk control, but banks in China and the United States haven't applied blockchain to credit risk control systems. Therefore, when implementing blockchain technology, banks need to pay special attention to possible risks and resistances. Implications of these results are discussed.