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There is much talk of blockchain, but when will FinTech
and other organisations offer their services to the blockchain? Concrete examples of this may first show themselves in 2018. We asked Peter Penning, IT Manager Solutions Delivery Centre at ING, and Steven Gort, data whisperer at ICTU about their views on blockchain.
Peter sets out to explain that blockchain technology is a container concept for some very different types of solutions. ‘Of course, there are commonalities that allow us to use the container concept’, he adds. ‘Commonalities in the technology include the use of peer-to-peer networks (not relying on trusted third parties) and using state-of-the-art cryptography for data integrity. Such solutions enable organisations to start working on, literally, shared truths instead of keeping their own systems of record.’ Do you consider blockchain an evolution or a revolution?
Steven: ‘Neither, actually. When you need to be able to choose, it’s evolution. Information transport evolves into an exchange of values, where value can mean everything and anything.’
Peter: ‘Using software constructs between organisations instead of within organisational boundaries is definitely revolutionary. The speed of implementation is more likely to be evolutionary because of the legal and regulatory implications. We do see governments and regulators stepping up in playing their part in the change, certainly in the Netherlands.’Is there a business case for blockchain?
Steven: Erm, what is that?! A business case?’
Peter: ‘Simply looking at the enormous number of applications that are currently being used within organisations (businesses, not-for-profit, governments) it’s very easy to see the value of shared solutions. Not only in terms of direct costs, but perhaps even more in terms of the indirect costs of having to reconcile data and resolving disputes. We are not looking at a few percentage points but at factors of increased efficiency.’What can blockchain mean for the financial and public sectors?
Steven: ‘Blockchain enables public services to use an open source infrastructure. I hereby put forward the proposition that the government can work without a generic digital infrastructure!’
Peter: ‘The promise of blockchain can be a quantum leap in making banking products near real-time, truly from an end-to-end perspective including offering regulators near real-time insight. For the consumer market, but perhaps even more in the capital markets space where clearing and settlement can be radically accelerated and improved. ING is committed to building up a deep understanding of the technology to make sure we will use it correctly at the right time. We have freed up a core group of our best software engineers to make the difference.’What uses for blockchain can you think of?
Peter: ‘One of the metaphors for Ethereum is ‘World Computer’, giving a clear indication that use cases are not industry specific. Every space in the economic domain where actors enter into contractual obligations and do not fully trust each other is a potential case for the technology. When looking at the financial industry, the initiatives of consortiums and incumbent trusted third parties are looking very promising, for instance, securities clearing and settlement.
Steven: ‘The possibilities are almost endless. Let’s start by reforming tax law, i.e. levying and collecting at the level of the value exchange I mentioned before. What’s the added value? No compliance audit and/or enforcement afterwards (!) with all its disastrous consequences.’
Further information about blockchain can be found in our trends report
On 30 March, IDnext organises an IAM and Blockchain event
, in collaboration with Sogeti.