BW Businessworld and Wipro conducted a series of
sessions to discuss Blockchain and its adoption in the Indian banking sector.
The event was titled ‘Banking on Blockchain - Charting the roadmap to
commercialization’ and it was conducted on 10th March 2017.
A panel discussed the state of readiness for Indian banks to use Blockchain. Some interesting use cases were also put forth by the panelists. Other topics discussed were interoperability, infrastructure, security and other type of 'Blockchains'.
Rajendra Mhalsekar, Head Corporate Banking Technology, YES Bank began the discussion by explaining the growth of Blockchain and bringing out some history behind it. He alluded to ARPANET, a network created 30 years ago by the U.S. Military, where 5 servers were well connected with each other. After that came the network which had similar functions, but facilitated connectivity between millions of users -- and not limited to just 5 servers.
Blockchain, which is the current technology trend, is a peer-to-peer network. As with the public Internet, more peers in the network results in more benefits. Rajendra further states that in some situations people misunderstand the way Blockchain functions; they need to understand the chain of commands and data that is stored in one block, with respect to connection of the other. Transparency of data in Blockchain leads to the trust in the technology, explains Rajendra.
“If more stakeholders are involved in Blockchain, it will become more beneficial,” said Rajendra.
Prasanna Lohar, Head of Technology (Digital Banking), DCB Bank spoke about use cases for India. He said the use cases will evolve only if there are problems to solve.
One of the use cases is property against loans. If a person goes to one bank for a loan, and then goes to a second bank for the same, the second bank would know that the person already applied for a loan, at another bank.
Another use case, according to Prasanna, is the voting system in India. It’s a problem of identity management, he said. “Blockchain could ensure that my vote is unique,” said Prasanna.
The third use case could be centralisation of KYC, in the absence of Aadhaar. All the banks could have the same view about the customer and know his credit history.
“Blockchain is useful for applications that need trust, transparency and truth,” said Prasanna.
On a different note, Prasanna spoke about creating security awareness to tackle the security concerns about Blockchain.
“It all starts with awareness. We are conduct awareness sessions for the internal stakeholders in the bank, wherein we talk about the benefits of the technology, and address all the concerns,” added Prasanna. “We also talk about how we can do outcome-based proof of concepts. We take the help of Prime chain to conduct this awareness drive.”
Ritu Kedia, CTO Lead Architect, Investment Bank Technology, Barclays India spoke about the application of Blockchain to capital markets and the distinction between public and private blockchain networks. She touched upon the consortium Blockchain platforms like R3 Corda, which are not Blockchain but “Blockchain Inspired” and have been built ground up for financial services.
Ritu also touched upon the privacy and scalability aspects of Blockchain and how they differ when applied to private permissioned Blockchain networks as opposed to Bitcoin, which is a public permission-less network; further sighting current industry developments around formation of Enterprise Ethereum Alliance to evolve the public Ethereum platform to address the enterprise requirements of privacy and scalability. Furthermore, given the number of blockchain platforms proliferation there is increasing industry focus on Blockchain platform interoperability. Akin to development of standards like the SQL standard for RDBMS, there are various industry efforts led by bodies like Hyperledger foundation to drive blockchain adoption to mainstream with membership from Digital Assets, R3 and the likes.
“Blockchain enables applications far beyond the original Bitcoin crypto currency, to essentially track ownership of any asset and enforce legal terms and conditions through Smart Contracts” said Ritu. She further adds “Blockchain” or “Blockchain Inspired” -- the technology enables a Shared Inter Organizational Database with Privacy and Authorization enforced without Central Ownership, and holds huge potential for disruption across multiple industries beyond banking and payments.
Harihara Natarajan, DMTS - Distinguished Member, MIT, Wipro updated the audience on how cloud services providers like Microsoft Azure, Amazon AWS, IBM Bluemix and others were pursuing Blockchain. He said the Ripple consortium and Interchain will allow these different Blockchains to work together.
Rajendra added that there is a need for standardization to ensure that all the Blockchains “talk to each other.”
