Escrow Agents Use Case
There are thousands of escrow agents throughout the US and Europe playing a pivotal role in facilitating
transactions and ensuring both parties are meeting their obligations before release of funds or assets.
Unfortunately, many escrow management activities are manual which often introduces inefficiencies.
Escrow activities are also generally regulated introducing significant costs both in terms of time and money for
agents. Further, these regulations are often set at a jurisdictional level which introduces complexity across
countries and in the case of the US between states.
Blockchain technology can assist escrow agents to improve their services and reduce operational costs while
providing greater security and transparency to their clients. Adoption of this technology in this sector has been
slow, however, due to the lack of access to expertise and resources.
A further impediment to Blockchain adoption in the escrow sector is that smart contracts, while powerful, lack
flexibility to accommodate unexpected circumstances or variations to contractual terms which is a common
feature of all commercial transactions.
- Legal and Regulatory Compliance: Escrow agents must comply with various legal and regulatory requirements, which can vary depending on the jurisdiction and the type of transaction.
- Cybersecurity Risks: Escrow agents hold sensitive financial information and funds, making them a prime target for cybercriminals. Escrow agents must invest in robust cybersecurity measures to protect against data breaches, fraud, and other forms of cyber-attacks.
- Operational Risks: Escrow agents must ensure that they have proper systems and controls in place to manage operational risks, such as errors, omissions, and other mistakes.
- Technological Advancements: Escrow agents must keep up with technological advancements and innovations that may impact their business. For example, the rise of blockchain technology and smart contracts may disrupt traditional escrow services by providing an alternative way to facilitate transactions.
Alternative Approach: Blockchain made accessible
Escrow agents generally facilitate complex transactions such as real estate and business sales which normally involve due diligence processes or conditions that must be met following execution of an agreement. Inevitably these terms are unique to the specific transaction, and this makes the rigidity of standard smart contract solutions uneconomical and potentially risky for escrow agents to use.
Blockchain technology is the right solution as it addresses almost all the current challenges faced by escrow agents, but it must be used in a different way. Imagine a portal which clients could access and enter into an agreement with a predefined dispute management process should issues arise. The buyer can place funds into escrow which is locked until both parties to the contract agree that conditions precedent are completed at which time assets and funds can be released under mutual assent.
Now imagine the situation where one party wants to vary the agreement and this can be done via the portal which the other party can accept or reject with the agent being as involved as they wish to be in this process. In the situation of a dispute, the agent can intervene and negotiate a resolution or alternatively refer this externally if needed.
This revolutionary framework exists and is available today.
We call it V-Contract.
Why does V-Contract make it possible?
Vleppo is a unique blockchain solution that’s purpose-built for escrow agents. Unlike other blockchain solutions, Vleppo has its own blockchain, and its V-Contract API makes it easy for escrow agents to integrate blockchain technology into their existing solutions. With V-Contract, escrow agents can achieve rapid digital transformation at a fraction of the cost and risk of implementing a dispute resolution and escrow function into their existing workflows.
The benefits of V-Contract are many, including:
- A robust contract management framework that allows users to create, update, and settle contracts within well-defined rules that are governed by blockchain consensus.
- An escrow capability that solves a critical pain point for businesses, particularly small-to-medium enterprises (SMEs). By unlocking additional revenues, CMS providers can increase their ARPU from existing customers while delivering a service that’s sure to enhance customer retention.
- Providing a transparent and secure dispute resolution process, which is governed by blockchain, that offers yet another alternative source of revenue, increasing the share of wallet of their existing customer base.
The End Result
Our solution provides a means for any escrow agent to leverage Blockchain technology without needing to have any expertise in Blockchain. Our team can assist with implementation and provide services to transform your business driving efficiencies and automating workflows enabling you to focus on growth.