case study
A Custom FinTech Platform for Risk Management in Financial Services
Our client is a Swiss fintech company specializing in Direct Risk Transfer (DRT).
They focus on using decentralized technology to make financial transactions more efficient, transparent, and secure. Operating in the financial services and insurance sector, the company targets use cases such as parametric insurance, asset protection, and risk management.
Partnering with BitStone, they set out to develop a blockchain-based platform that leverages smart contracts to streamline event-driven risk transfer.
The Challenge
Our client aimed to transform the traditional event risk transfer process, which often involves multiple intermediaries, high costs, and a lack of transparency. The conventional system relies heavily on intermediaries like banks, insurance companies, and legal entities to manage risk agreements and payouts, leading to increased transaction costs and delays. Additionally, the lack of transparency in these processes often leaves stakeholders with limited visibility into the terms and execution of risk transfers, fostering mistrust and inefficiency.
The client wanted to address these inefficiencies and meet the needs of various target users, including insurance companies, brokers specializing in parametric insurance, asset management firms, and companies seeking asset protection.
To overcome these obstacles, the company wanted to create a solution that could:
The Solution
BitStone worked closely with the client to design and implement a Direct Risk Transfer solution powered by blockchain and smart contracts, combining financial automation with a secure, scalable cloud infrastructure.
This platform leverages smart contracts and blockchain technology to automate risk transfer agreements and trigger payouts based on predefined conditions, such as specific natural events. The solution also incorporates cryptocurrency for secure financial transactions, supported by a robust cloud infrastructure to ensure scalability and reliability.
The team, composed of 6-8 experts in blockchain, smart contracts, cloud technologies, Node.js, React, and database management, operated in an Agile SCRUM framework with 3-week sprints, leveraging Continuous Integration (CI) and Continuous Delivery (CD) for rapid development, testing, and deployment.
Technologies
Smart Contracts & Blockchain
Automate risk transfer and payouts based on triggers like earthquakes.
Cryptocurrency
Enables secure transactions using crypto wallets like Metamask.
Cloud Infrastructure (AWS)
Amazon EKS, Amazon S3, and DynamoDB.
Backend
Node.js, GraphQL, Redis.
Database
PostgreSQL.
Benefits
Increased Efficiency
he platform automates risk listing, investor matching, and transaction management, saving time and resources.
Reduced Costs
The solution eliminates intermediary fees, potentially leading to lower transaction costs.
Enhanced Transparency
Leveraging blockchain for secure and transparent risk transfer agreements.
Improved Scalability
The solution is designed to handle a growing user base and future risk types.
Innovative Solution
Provides a novel approach to natural event risk transfer in the financial services industry.
Resource optimization
Utilizing Amazon EKS optimizes resource allocation by scaling the Kubernetes cluster based on actual workloads.
Infrastructure as Code
The IaC with Terraform enables cloud-agnostic infrastructure management, improving portability for future migrations.
Live Application
The platform is operational with initial user adoption and data volume is gradually increasing.
Security Considerations
Security was prioritized throughout the development and deployment of the client’s platform to ensure the highest level of protection for users and their transactions. Key security measures implemented include:
ISO 27001 Certification
Adhering to best practices for information security management, ensuring comprehensive protection of data and systems.
AWS Security Hub
A centralized system for monitoring security findings, enabling proactive threat detection and mitigation.
mTLS
mTLS (mutual TLS)
Encrypting communication between services with mutual authentication for enhanced security.
Tetrate (Zero Trust)
Enforcing a zero-trust security model that verifies all communication channels before granting access, ensuring strict control over network interactions.
PeckShield Audit
An external security audit identified and addressed potential vulnerabilities to ensure robust security in the platform's core functionality.
Key Insights
The collaboration resulted in a blockchain-powered Direct Risk Transfer platform that simplifies event-based risk agreements by reducing intermediaries, automating payouts, and improving transparency.
With its secure, transparent, and scalable architecture, the platform sets a new standard for efficiency in the financial services industry.