NFT Use Cases II (Application-based)
Date: 22 April 2023
Author: Gaya Chandrasekaran
In the previous article we explained how NFT use cases go beyond digital art, what drives the value of an NFT and how some sectors find it more straightforward to use NFTs to promote their brands and take control of client engagements.
NFTs have broad applications and the current and next few articles will try to capture a sneak-peek into the breadth of such applications. In the current article we explore a few applications beyond digital art and brand or client engagement, how it works and what firms are currently involved.
The next two articles focus on sector-based use cases of NFTs.
#1 Insurance Claims
NFTs are used for insurance claims by providing a digital and immutable record of the claims process.
How
- Proof of ownership: NFTs can be used to prove ownership of insured assets, such as artwork or jewelry, in the event of a claim.
- Fraud prevention: NFTs can be used to prevent fraud by providing a secure and tamper-proof record of the claims process.
- Claim settlement: NFTs can be used to settle claims by providing a transparent and efficient way to track claims and payments.
- Loss assessment: NFTs can be used to assess losses by providing a digital record of the insured asset and any damage or loss incurred.
- Resale value: NFTs can be used to track the resale value of insured assets, which can help to determine the appropriate level of coverage.
Firms Currently Involved
- Lemonade: Lemonade, a US-based digital and AI-based insurance platform, uses NFTs to issue virtual insurance policies and track claims in a transparent and secure manner.
- Etherisc: Etherisc is a German decentralized insurance platform that uses blockchain technology and NFTs to issue policies and manage claims.
- Insureum: Insureum is a South-Korean blockchain-based insurance platform that uses NFTs to manage insurance policies and claims, as well as track the provenance and ownership of insured assets.
#2 Compliance & Regulation
NFTs are used in compliance and regulation by financial services firms to provide transparency, security, and accountability in their operations.
How
- KYC (Know Your Customer): NFTs can be used to store and verify customer information, ensuring compliance with regulatory requirements.
- AML (Anti-Money Laundering): NFTs can be used to track and verify transactions, helping to prevent money laundering and other financial crimes.
- Regulatory compliance: NFTs can be used to provide a secure and tamper-proof record of compliance with regulatory requirements, such as reporting and disclosure.
- Digital identity: NFTs can be used to create a digital identity for individuals and entities, helping to ensure compliance with regulatory requirements for identity verification.
- Smart contracts: NFTs can be used to execute automated financial transactions through smart contracts, ensuring compliance with contractual obligations and regulatory requirements.
Firms Currently Involved
- BitAML: BitAML is a US-based compliance advisory firm that uses NFTs to track and verify compliance with AML and KYC regulations.
- Polyient Inc: Polyient is a blockchain-focused investment firm (investing in teams that are innovating in Web3 across blockchain, gaming and finance technology) that uses NFTs to represent ownership and compliance with regulatory requirements for digital assets.
- Sygnum: Sygnum is a Swiss-based digital asset bank that uses NFTs to create a secure and compliant digital identity for its clients.
#3 Securities & Investments
NFTs are used in securities and investments by financial services firms to provide a secure and transparent way to track ownership, transfer, and trading of assets.
How
- KYC (Know Your Customer): NFTs can be used to store and verify customer information, ensuring compliance with regulatory requirements.
- AML (Anti-Money Laundering): NFTs can be used to track and verify transactions, helping to prevent money laundering and other financial crimes.
- Regulatory compliance: NFTs can be used to provide a secure and tamper-proof record of compliance with regulatory requirements, such as reporting and disclosure.
- Digital identity: NFTs can be used to create a digital identity for individuals and entities, helping to ensure compliance with regulatory requirements for identity verification.
- Smart contracts: NFTs can be used to execute automated financial transactions through smart contracts, ensuring compliance with contractual obligations and regulatory requirements.
Firms Currently Involved
- tZero: tZero is a blockchain-based platform that uses NFTs to represent ownership of securities and enable trading of digital assets. A US-based company.
- Harbor: Harbor is a platform that uses NFTs to represent ownership and compliance with regulatory requirements for private securities. Acquired by BitGo in 2020.
- Securitize: Securitize is a platform that uses NFTs to represent ownership of securities and facilitate trading of digital assets.
#4 Supply Chain Management
NFTs are being used by firms in supply chain management to provide a secure and transparent way to track the movement of goods and ensure authenticity. By leveraging blockchain technology, companies can create a secure and immutable record of the provenance of each item, ensuring that it is authentic and has not been tampered with.
How
- Product authentication: NFTs can be used to represent the authenticity of products, such as luxury goods and pharmaceuticals, helping to prevent counterfeiting.
- Tracking and tracing: NFTs can be used to track the movement of goods throughout the supply chain, providing transparency and accountability.
- Quality assurance: NFTs can be used to verify the quality and safety of products, ensuring compliance with regulatory requirements.
- Environmental sustainability: NFTs can be used to track the sustainability of products, such as food and textiles, ensuring compliance with environmental standards.
- Digital contracts: NFTs can be used to execute automated transactions and contracts between parties in the supply chain, reducing the need for intermediaries and increasing efficiency.
Firms Currently Involved
- UNIDO is a United Nations agency that uses NFTs to track and verify the movement of goods in developing countries, helping to prevent fraud and corruption.
- European Union plans to combat counterfeiting of real-world goods by developing a strategy that would use blockchain technology and NFTs by 2023.
- Nestle: Nestle is using NFTs to track the provenance of its coffee supply chain. Each bag of coffee is assigned an NFT, which is then used to track the beans from the farm to the roaster and finally to the retailer.
- IBM: IBM is using NFTs to track the provenance of high-value goods, such as diamonds and luxury goods. By creating an NFT for each item, the supply chain can be tracked and verified, ensuring that the goods are authentic and have not been tampered with.
About the Author
Gaya works in the Global Digital Solutions Group (DSG) within Santander Corporate & Investment Banking (SCIB), which focusses on developing innovative, sustainable and profitable digital capabilities and providing state of the art advisory services to clients.
She joined Santander in 2014 gaining broad experience across Corporates & FIG in SCIB and has also worked on several strategic initiatives including regulatory deliverables. Her work involved deal structuring, due diligence and portfolio management. During this period, she has won awards and nominations to Accelerating You Programme for Future Leaders and Global Risk Leadership Programme.
Gaya recently completed the Fintech Programme from Oxford University. She holds a Masters in Finance from London Business School (Recipient of Graduating Student Award) and an MBA (Gold Medallist) from India.
She has contributed actively to alumni engagement at LBS since graduation through several leadership positions, most recently as an ExCo Member of London Alumni Club where she led events on identifying fintech winners, cyber risk, sustainability & factor investing involving C-suite speakers, industry experts and faculty.
Gaya is a Mentor and the Head of Personal Excellence Programme (PEP) for London with Women in Banking & Finance (WIBF). She is passionate about supporting women in their ambitions and enjoys organizing knowledge-sharing networking events.
Outside her day job, Gaya is a self-taught artist and has been influenced by art right from her early childhood. She loves learning new techniques and underwent training in India as well as in the UK (Slade School of Art). Her choice of themes are inspired by key life moments. An expression of her thoughts and emotions, her artworks invite the audience to go deep within, explore and connect with their own experiences.
Gaya offers NFTs in lieu of a Certificate of Authenticity to all her collectors – its her mission to facilitate digitisation to her audience. Based on feedback from a renowned NFT Collector she is now exploring software tools to mint NFTs of pure digital artworks.
Gaya’s first solo exhibition was in 2018 at Santander’s London office, a fundraiser where she sold >70% of artworks donating 50% of proceeds to charity. Her painting, ‘The Golden Lion’ won a special commendation in the David Shepherd Wildlife Foundation’s #sketchforsimba competition in 2019.
She conceptualised the first ever Art Exhibition within the LBS community, which led to LBS Art Week in 2021 where her paintings were selected for the online exhibition and she was a chosen speaker of the Artists Panel. She exhibited her artworks with The Holy Art Gallery and The Boomer Gallery in London during 2022. Her artworks are published in the Artist Talk Magazine Issue 22 & 23.
“Please note the opinions expressed within the content above are solely the author’s and do not reflect the opinions and beliefs of people, institutions, or organisations that the owner may or may not be associated with in a professional or personal capacity.”
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