“No shoes allowed,” says the sign on the door. I comply and enter the computer centre to create a Hotmail account. It was 1999. It was impossible to have understood the immense potential of the internet at the time, but I was excited. My son, on the other side of the globe, could communicate with me instantly using this innovative technology. Fast forward to 2018 and the benefit offered by blockchain technology, and all it can do, creates in me the same wistful excitement of 1999, but this time while thinking about the great things blockchain can do for the future of the digital communications industry.
Blockchain is all set to revolutionise how all industries, telecom included, protect their data and their customers’ digital information. PM Narendra Modi recently expressed his eloquent support of blockchain, calling it a “disruptive technology” essential to all workplaces. The banking industry has already begun incorporating blockchain. As the lines continue to blur between telecom players and payment banking, how can telecom service providers prepare for this transformation?
Reliance Jio, Bharti Airtel, Vodafone and other telcos are executing plans to become big players in the mobile banking industry. The government aims to convert over 1.5 lakh post offices into payment banks to service 130 crore Indians. Payment banking permits telcos to offer a much-needed solution to Indians without access to traditional banking, including low-income families and migrant workers. With attractive offers being rolled out, regular customers of traditional banking will hop on to this bandwagon for the ease-of-use it provides for day-to-day transactions. RBI recently tightened regulations around the KYC process for onboarding new mobile customers.
The traditional method proved unable to prevent tampering and manipulation by miscreants. The e-KYC is a welcome attempt to tie in more accountability and protect personal data, but there are websites and hackers that can expose the data, including Aadhaar numbers. Blockchains add multidimensional layers around our data and tighten up protection. Managing this vast amount of data also requires highly responsive technology that is elastic and scales along with the growing customer base. Blockchain could be the answer. But what exactly is blockchain? Simply put, it’s blocks of digital information that are linked together in a chain. It is different from online database, because every transaction is tracked and the entities involved have full visibility into the details. Unique “digital fingerprints” are generated for each data point, and leave digital trails behind as they exchange hands.
This makes it impossible for anyone, including banking middlemen, to erase or modify information without affecting the parties involved, including the customer. Customer passwords have been susceptible to hacker manipulation, but blockchain is successful in preventing data breaches. Currently, banks manage their online ledgers by relating names, authorised passwords and account details to transactions. But there are many weak points in this system that make it vulnerable to actions by a few corrupt individuals, or data breaches by hackers. Such a system involves relying on the actions of a few intermediaries who have the power to manipulate transactions and potentially cover their tracks without alerting banks or the end-user until it may be too late.
Blockchains are touted as the “future of cybersecurity” and have consistently thwarted cyberattacks due to the unique ability to track each transaction through their network. Each user is provided a unique authentication key for additional protection that removes the need for passwords which are a target for hackers. Globally, over 200 banks and financial institutions collaborated and are incorporating Corda, a blockchain technology, as an integral part of their systems with cybersecurity being the driving force. In India, the State Bank of India announced its intention to implement blockchain technology for smart contracts and KYC in the immediate future. Telecom providers looking to lead with mobile payments need to provide greater data security for their customers’ personal information and minimise the risk of misuse by a few individuals.
News travels fast, and bad news at lightning speed. Today, social media users are becoming well aware of the importance of robust data policies, and with the European Union’s new General Data Protection Regulation (GDPR), there is increasing demand for higher levels of data security. Telcos looking to sustain their business over a long term, therefore, need to maintain their customers’ trust in themselves. Blockchain also provides a greater level of automation and leads to more streamlined processes within organisations. Analysing such vast amounts of accurate customer data can provide leaders with greater insights into customer behaviour and guide their strategy.
It is a gross but popular misconception that blockchain is applicable only to Bitcoin. Indeed, its origins are deep-rooted in the cryptocurrency domain, but it has far-reaching applications in every walk of life. The internet, in its infancy, was intended for time and power-sharing between companies for processes that were too complex for one to handle at a time. It has overtaken that initial purpose by leaps and bounds.
Those dismissing blockchain as a Bitcoin technology without evaluating it for their sector may do so at their own peril. In short, blockchain is here to stay and telcos will need to incorporate it into their processes in order to stay lean, stay secure, and to always stay ahead.
(With inputs from Kartik Berry and Chandana Bala)