By definition, a “smart contract” is a computer protocol intended to digitally facilitate, verify or enforce the negotiation or performance of a contract. This digital banking strategy allows for seamless authentication transactions without third parties.
Once a banking contract is initiated and executed, the contract most often sits on the shelf, which is usually a good thing because it generally means the contract is without issues. But there are other critical components to the contract, including performance factors and maintenance. Prior to smart contracts, which have management and alert protocols built-in, credit unions faced the challenge of determining how best to manage these contracts to ensure that the vendors were adhering to contractual terms.