Blockchain, a public digital ledger of transactions, has the potential to enable significant improvements and efficiencies to economies through a wide variety of solutions.
Blockchain, a public digital ledger of transactions, has the potential to enable significant improvements and efficiencies to economies through a wide variety of solutions. Marked by its high security, speed, encryption and immutability, Blockchain technology is already finding deployment in finance, supply-chain management, retail, distributed computer storage, digital contracts, healthcare, shipping, and even entertainment. Technology giant Microsoft identified the significance of Blockchain in the enterprise and social sectors early, and has been strengthening its focus on the technology globally. At a Blockchain conference titled ‘Creating tomorrow today with blockchain’, held in Mumbai last month, Peggy Johnson, executive vice-president, business development, Microsoft, said, “Blockchain gained visibility in 2008 due to Bitcoin. I was intrigued by the technology that powered it. Today, it has become a global phenomenon with multiple use cases across multiple industry sectors.” No wonder then that last year Microsoft built an open source solution set for high-speed transactions for enterprise customers. In terms of security aspects of Blockchain, Microsoft has been engaging with enterprises, regulators and policy makers in an attempt to deepen the cyber security policy dialogue. It has also engaged with GS1 in the supply chain space using Blockchain to remove inefficiencies and wasteful use of resources. “For instance, we did a project with a US-based shipping line recently. The shipping industry spends around $30 billion on insurance, wherein settlement can consume weeks and months. We worked with Ernst & Young and came up with a solution to streamline this,” said Johnson.
According to Mohammed Nasiruddin, senior program manager, Microsoft India, the factors determining Blockchain’s appropriateness include scenarios wherein businesses cross boundaries, multiple parties manipulate data, intermediaries control the single source of truth and process involves manual verification steps. In India too, Blockchain technology is seeing the firsts of many deployments as businesses identify use cases. For instance, Bajaj Electricals has started implementing Blockchain for making payments to suppliers. As Pratap Gharge, executive president and CIO, Bajaj Electricals, explains, the supply chain space is small-scale in nature and firms need faster payments. “Our first phase of Blockchain implementation is already live and we are planning to introduce bill-to-bill transaction in the second phase,” he said. The country’s biggest public sector bank, State Bank of India (SBI) has been at the forefront of incorporating Blockchain technology in its myriad functions. According to Sudin Baraokar, advisor – innovation, State Bank of India, this year has seen a significant shift to business-driven and outcome-based use cases.
“We are working on getting the entire bank guarantee on Blockchain, alongside we are also working with Microsoft and Intel on bad loan exchange—there is around Rs 10 lakh crore worth of bad loans in India,” he said, adding that last year SBI developed over 10 pilots to check these solutions. According to Sudip Banerjee, Group CTO, Reliance Capital, Blockchain can significantly simplify the claim process,.cutting down costs and eliminating frauds. At the same time, there are certain challenges. Akhil Handa, head, fintech and new business initiatives, and advisor to MD and CEO, Bank of Baroda said there is a lack of production-ready use cases. “One of the major challenges is adoption. Many institutions still don’t have their core systems in place. The challenge is to get every officer to start putting every record on Blockchain,” he said. The negativity around Bitcoin, the original use case of Blockchain, could also undermine the adoption of this technology, warns Rohas Nagpal, CEO and chief architect of Blockchain start-up Primechain. “We have to identify the relevant use cases such as KYC and exchange for stressed assets. We need to understand that there is too much of hype around the technology,” he said.