Even as the relatively new Blockchain technology has found no significant used cases so far, several countries, banks and companies worldwide are betting big on it.
Blockchain is a technology where digital information or blocks are stored in a public database (chain). The technology is transparent, decentralised and immutable. While it is the technology that makes Bitcoin and other cryptocurrencies work, the institutions and governments have shunned cryptos but are bullish on blockchain.
Recently, HSBC, a global banking and financial services firm, has announced that it will be shifting $20 billion worth of assets to a new blockchain-based custody platform by March even as the banking major plans to digitize the traditional paper-based records of private placements.
This the London-headquartered bank said would help reduce time for the investors to make queries and also give allow real-time access to records of securis bought on private markets, according to the bank’s statement to media.
IT major Cisco has also bagged a patent on how it count leverage blockchain to secure the data in 5G telecommunication networks.
The Central Bank of Sri Lanka is also bullish on blockchain. The bank, in a post on its website, has called for technology companies who can develop a blockchain-based know-your-customer (KYC) platform. Payments giant Mastercard has also been heavily investing in the technology and has become the third company after IBM and Alibaba in filing blockchain-related patents.
Not only leading banks and technology giants are carrying out discussions blockchain but several large economies including India and China are also quite bullish on the technology and its usage right from keeping financial frauds in check to curbing fake news to help prevent sexual assaults amongst others.
India is in the process of preparing a national framework to support the wider deployment of blockchain use cases and is drafting an approach paper on the National Level Blockchain Framework which discusses the potential for distributed ledger technology and the need for a shared infrastructure for different use cases. Indian companies such as TCS and Tech Mahindra are already developing some solutions around the technology, which is not even a decade old.
However, some banks and experts are of the view that while everyone is claiming to have been developing solutions around blockchain, there has been no successful used cases.
Talking to IBS Intelligence, a COO of a leading bank in Dubai, said, “It is heartening to see banks discuss blockchain but it is outdated now. Blockchain is what? It is a shared ledger i.e I and you can share the ledger and we will be happy to share among ourselves. However, between the banks, will they share their customer details? So is the blockchain fully united at present? The answer is No.”
There are several PoCs (proof of concepts) created in the last few years but no one has actually tested its applications, experts say adding that next year the industry might witness some real used cases.
Meanwhile, a study by Accenture said that adopting artificial intelligence (AI), blockchain and robotic process automation (RPA) might not be such an easy task for financial companies given that there could be many unintended consequences.
Only 11 per cent of risk managers describe themselves as fully capable of assessing the risks associated with adopting AI across their organisations, and even fewer said they are fully capable of assessing the risks associated with RPA or blockchain (9 per cent and 5 per cent, respectively), it added.