Blockchain Bears The Potential To Evolve Businesses
A technology that can create trust in the market can be beneficial to all the variants especially in the BFSI industry. Blockchain, the most talked about technology in India, bears the potential to evolve businesses as use cases are said to increase by the start of the year 2019
Blockchain has seen a rise in datacenters while the BFSI industry is still understanding the potential of this technology. ‘Rise of Blockchain in Datacenters’ brought the industry experts together in an insightful panel discussion at the 2nd BW Businessworld BFSI Cloud and Datacenter Sumit 2018. One of the most renowned names in India in the field of Blockchain technology, Prasanna Lohar, Head – Technology – Innovation & Architecture, DCB Bank discussed the ways in which the technology could evolve datacenters and disrupt the market.
“Blockchain has the potential to evolve the way of doing businesses. Enterprises will look at Blockchain 2.0 examples and used cases and there will be ease of sharing information through those platforms. Centralized database would be distributed through smart contracts and technical blockchains are going to be an advantage for the next level of infrastructure. By the end of 2018, I am sure there will be a rise in enough used cases with respect to blockchain in India along with optimization in storage and evolution of traditional ecosystems.”
Prasanna Lohar continued to provide statistics on the rise of blockchain in datacenter, “In the year 2030, we will have tons of used cases and various business models working closely with the technology. India is already seeking to institutionalize blockchain while use cases are being studied simultaneously.”
While use cases and smart contracts would be seen more in number by the end of 2018, India will also see more advantages of blockchain along with DLT (Distributive Ledger Technology) according to Sudhin Baraokar, Global IT & Innovation advisor.
He said, “According to Gartner, all the innovations by fintechs would be based on blockchain by the year 2030. Core banking systems are running on the collaborations between fintechs and major names in the BFSI industry. Currently, Blockchain and Distributive Ledger Technology are being aligned to provide financial services. The banking industry all over the world is on the ledger and through smart contracts, there will be many reforms developed on the blockchain. In India, we have seen that Private Permission Blockchain has been quite effective as data theft keeps lurking around large organizations driving innovation. In order to strengthen the community and generate trust with various technological trends, we have united 30 banks in India to work on a common system.”
Some experts see the technology disrupting the BFSI industry in a few years and some are yet hesitant with adapting to the technological trend due to lack of specific guidelines. The blockchain is known as a buzzword for fintechs and needs to create a legacy in order to create a trust factor in the market.
“From the 1980’s there has been a shift in the isolated banking system to a core banking system and centralized ledgers are being distributed all over networks internationally. This does make the technology vulnerable and the current trends of blockchains in the BFSI industry lack specific guidelines. Parallely, major tech giants are creating their own blockchains which again would create an issue of trust along with the addition of DLT. Hence, I feel that there is a lot of potential but trust must be generated in the community with respect to these technological trends,” said Mithilesh Singh, Head – Technology Audit, IDFC Bank.
Samir Khare, CIO, SBM, during the discussion, pointed out the reality of blockchain in a new digital landscape. He stated that fintechs are contributing majorly towards blockchain but are suffering while understanding fraudulent use cases.
“Blockchain is an exciting buzzword and fintechs are doing a great job in encouraging the technology. However, they lack proper balance sheets unlike banks and that is why I keep insisting my team to understand the legacy and balance sheets of our innovative clients. In today’s world if anyone wants to set up a new bank then they must adopt blockchain and it will generate a lot of revenues. But if the used cases are around fraud then there is a risk cost associated with them capable of quantifying the amount. We really need to identify this as Blockchain or Blocked-Chain," said Samir Khare.
Muneebuddin Mohammed, Vice President, Cloud4C opined, “Blockchain is the next big thing although I see a big gap in between IT and businesses and their understanding on the advantages of the blockchain. Proof of Concept/POCs have helped in bringing the blockchain concept to reality while not replacing decentralized database Disintermediation too is a growing advantage in the blockchain.”
The discussion brought out both sides of the coin for blockchain and generated some valuable industry insights. Suresh A Shan, Head – IT & Innovation, Mahindra and Mahindra Financial Services moderated the first panel at the summit.