Does blockchain have a place in business?
Streamlining government and banking
Jason Ward, senior director of enterprise UK&I at Dell EMC, says the blockchain can streamline clearing processes and internal operations for banks. There’s also huge potential for governments right around the world, such as civil servants using the blockchain to combat fraud, error and the cost of paper-based systems.
“Blockchain offers the promise of addressing some of the key challenges faced by the financial sector, and offers a way of improving central clearing, back-office operations and cross-border payments. If banks started sharing data using a tailor-made version of Blockchain, they could essentially remove the need for a lot of manual processing, and speed up transactions,” Ward explains.
Governments are also starting to explore the possibilities of the blockchain, he says, as exemplified by a recently published report from the Office for Science, which recommended the UK government begins work to exploit distributed ledger technology in the public sector.
“The report highlighted how distributed ledger technology could provide governments with new tools to reduce fraud, error and the cost of paper-intensive processes,” explains Ward. “Of course, there’s a need for more education if we are to ensure policy-makers understand how it works and its potential applications, independently from Bitcoin.
“Blockchain has the potential to help drive unprecedented opportunities for innovation, as well as new and better ways to interact with citizens and businesses, and more efficient regulatory initiatives.”
James Lowry, EMEA head of state at Street Global Exchange, is also a believer in blockchain technology. He says it will transform the global financial system, but there are still some challenges, the biggest of which is cybersecurity.
“Blockchain is one of the more compelling vehicles in terms of technological disruption – and opportunity – because it could create a single source of truth for transactions and other types of shared data. We believe that this could have far-reaching consequences for the global financial system,” Lowry says.
“There are some challenges,” he adds. “One is that blockchain must show that it has the wherewithal to withstand a major cyber-attack. Its cryptography does provide a strong element of security, but it’s unlikely to be infallible against all cyber-threats. Secondly, numerous firms are creating their own private blockchains, which is somewhat contrary to the idea of a public, shared blockchain.”
But, in the end, the technology will evolve and even more benefits will be realised.
“While the industry is still far from realising the full impact of blockchain and other emerging technologies within financial services, if we can make blockchain the internet of financial services, we all benefit – particularly if it allows for real-time settlement across different geographies and currencies,” concludes Lowry.