Blockchain also has application in identity verification and validation. By Srinath SrinivasanEurope leads the way when it comes to blockchain adoption. The story there has a lot of private players whose ambitions are bolstered by institutional investors and a strong infrastructure.
A recent Nasscom report says that in India, blockchain revolution is mostly driven by the public sector where use cases such as land registry maintenance, medical record maintenance and anti-counterfeiting applications are given top priority. The report suggests that the banking, financial services and insurance (BFSI) sector has nearly 50% of all production level blockchain implementations.
Recently, one such instance of a large blockchain application has been implemented by a private bank for a public limited company. In a first-of-its-kind application in Asia, Yes Bank, as an issuing and paying agent (IPA), facilitated the issuance of a Commercial Paper (CP) of Rs. 100 crore using blockchain technology for industrial conglomerate Vedanta.
This transaction was completed in partnership with US-based MonetaGo. MonetaGo built the solution using Corda Enterprise, a technology provided by R3, an enterprise blockchain software firm. Asit Oberoi, senior group president and global head- Transaction Banking Group, Yes Bank, says that the implementation ensures reduction in turnaround time for issuance and redemption, getting immutable digital records of the entire transaction documents thereby reducing operational risk, having real-time visibility of the CP issuance and redemption and having a common network for all participants in the CP issuance and redemption process.
“By working on this implementation with Vedanta, we built a bigger framework for other customers as well for the future. Now transactions can happen within an hour irrespective of the size. It involves a lot of data, risk management control and complex analytics,” explains Oberoi, talking about maintaining a blockchain ledger.
According to him, blockchain marks the shift from simple and quick digital applications to highly process oriented digital banking operations. It also marks a shift in the nature of jobs being created. “We now have data analytics experts, data miners and end-to-end engineering experts because ofsuch technologies. This will also hold good when ‘digital banks’ start coming up,” he adds.
The government remains the most critical stakeholder as the guidelines formulator. “We are a tech company working in the banking space and we have to comply with a lot of guidelines in both tech and banking spaces. We are also working closely with Nasscom who can in turn recommend in making these guidelines which would increase the penetration rate of these technologies and help develop local talent here,” says Oberoi.
Blockchain also has application in identity verification and validation. Today, most of it is used by the government for citizen services. However, homegrown players such as Subex is working towards solutions using blockchain which can enable transactions at both individual and enterprise levels.“Using blockchain to validate identities of those who authorise payments across the globe is a single major use case towards ensuring ‘digital trust’for brands. Most of this work is at proof of concept level today and will soon roll out when we sort out unit economics of implementing the same,” says Vinod Kumar, CEO and MD, Subex.
Another major development has come from Tech Mahindra after its collaboration with Adjoint, a UK-based fintech firm, for implementing secure enterprise financial management and insurance services.“Auditors can be given access to an immutable record of all transactions, facilitating reporting and compliance as well when the business cases are implemented. This is part of our bigger investment, TechMNxt charter which focuses on leveraging next generation technologies and solutions, like blockchain,” says Rajesh Dhuddu, global head -Blockchain, Tech Mahindra.
Domestic developments indicate the growing blockchain ecosystem in the country. According to 6Wresearch, the blockchain market is projected to grow at a CAGR of 58% during 2018-24.