Evolving Landscape of Blockchain Driven Services

The technology industry is evolving rapidly, with emerging technologies changing the digital
landscape and transforming business models. Even the way technology is perceived and delivered to
businesses and end users, has seen a significant change over time. From the personal computer and
client server area, we saw the advent of internet, followed by what we call the fifth wave in
technology which is SMAC (Social, Mobility, Analytics and Cloud). As these technologies are now
being adopted on a large scale globally by businesses and IT leaders, there are a few upcoming
technologies which we can foresee changing the business and technology landscape as we speak.

One of these technologies is Blockchain. We all have heard about Bitcoin at some point of time, and
this new crypto currency was perceived to be the next new disruption in global finance. However,
very few people know that Blockchain is actually the technology that runs bitcoin. Blockchain
technology which has evolved over the past decade, is considered as one of the biggest ground
breaking technologies with a great potential to impact every industry from manufacturing to
finance, or education.

So, what do we understand when we say Blockchain. In simple terms, we can say it is an answer to
digital trust, as it records important information in a public space and doesn’t allow anyone to
remove it. It is transparent, decentralized and time-stamped. It is a distributed ledger that can
record all transactions between two parties effectively and in a secure way. Blockchain technology
has been at the forefront of many useful innovations, the most popular being Bitcoin.

Bitcoin has been seen as a technology driver which has the potential to impact the global financial
industry in a large way. It was a digital currency introduced in 2009, and considered to be a
Blockchain innovation. Bitcoin has seen acceptance as a new form of digital currency and financial
transaction in many countries. In just a few years it has reached a market capitalization of $10 to $20
billion. Many sectors use Bitcoin for payments and digital transactions, and it is only a matter of
time, the technology would gain wider acceptance across countries as a means of digital currency.

The financial sector is seen as the biggest beneficiary of Blockchain driven services, as the
technology makes it possible to transfer and exchange value securely. There is no need for an
intermediary, and the ability to conduct secure transactions without having a middleman brings
disruption to the traditional notions of currency, authority and ownership. The concept of
distributed ledgers in banking is gaining popularity, and many banks are interested in this
technology. It has the potential to speed up back office settlement systems. Some of the global
technology leaders like Capgemini, already have a portfolio of offerings for the banking and financial
industry.

Many global technology and consulting companies are doing a lot of research on how Blockchain,
and the use of distributed ledgers can be used by banks in several business areas like payments,
asset management, loyalty and loans. A wide range of consulting and technology services for banks
are being proposed, for an end to end Blockchain led digital transformation project. Some of these
services are conducting Blockchain innovation workshops, feasibility studies, business case
assessments, operating model design and advisory services. In India, Infosys has set up a Blockchain
based trade network in India in partnership with seven banks. The initiative is called India trade
connect and it includes the major banks like Axis Bank, ICICI Bank, IndusIND Bank, RBL Bank, Kotak
Mahindra Bank, South Indian Bank and Yes Bank.
Let us look at some of the Blockchain services which are adding value to the Banking and Financial
industry, and the use cases and trends evolving in this area.

1. Fraud Reduction

Blockchain has been recognized as the new technology that would reduce fraud in the financial
world, where about 45% of the financial intermediaries like stock exchanges and money transfer
services are prone to financial crimes routinely. Most banking systems in the world are built on a
centralized database and are more vulnerable to cyber-attack, because once hackers attack the one
system they get complete access. This technology would get rid of some of the crimes committed
online today against our financial institutions.

2. Know Your Customer (KYC)

Financial institutions spend anywhere between $60 million up to $500 million a year to keep up
with Know your Customer (KYC), customer due diligence regulations, according to a Thomson
Reuters Survey. These regulations are meant to help reduce money laundering and terrorism
activities by requiring businesses to verify and identify their clients. Blockchain would allow an
organization to access verification details of a client by another organization, thus avoiding
repetition of the KYC process. The reduction in administrative costs for compliance departments
would be quite significant.

3. Smart Contracts

Blockchain technology facilitates smart contracts, as they facilitate storage of any kind of digital
information, including the computer code that can be executed, once two or more parties enter
their keys. Contracts could be created and financial transactions to be executed when this code is
programmed, according to the set criteria.

4. Clearing and Settlement

The inadequate mechanism that records loans and securities, costs investment banks billions of
dollars to run and maintain. Today, this is managed by a myriad of messages and manual
reconciliation. One of the best known examples of this is restructuring of the Australian Securities
Exchange, which aims to transfer a lot of its post-trade clearing and settlement to a blockchain
system. According to many research firms, the biggest investment banks in the world could save $10
billion, by adopting blockchain technology to improve the efficiency of clearing and settlement.

5. Trade Finance

Trade finance is still mostly paper based, such as bills of lading or letters of credit being sent by fax
around the world. Many think that blockchain is an obvious solution, especially as numerous parties
need access to the same information. This is another very important element of the supply chain,
and blockchain can offer a vast amount of benefit in this area. For instance, Mr. Ramachandran,
head of innovation for commercial banking at HSBC, predicts that it would take five years to digitize
the entire trade ecosystems, such as sugar or energy, but blockchain technology has the potential to
be game changing.
 6. Syndicated Loans

When any US company raises money via a syndicated loan, it takes an average of 19 days for the
bank to settle the transaction. When a loan changes hands between banks or a borrower repays the
loan early, much of the communication is still done by fax. However, it is important to find a way for
block-chains to connect to each other so that changes to a loan's ownership is quickly reflected
across all systems. Having said that, like trade finance, blockchain technology will not solve all the
inefficiencies in the syndicated loan market alone.

7. Payments

Blockchain disruption could be highly transformative for the payments process. It would allow banks
higher security with minimal costs to process payment between organizations and their clients and
even between banks themselves. Blockchain would thus get rid of all the intermediaries in the
payment processing system.

8. Trading Platforms

With blockchain-based technology, there would be momentous changes to our trading platforms,
with the risk of operational errors and fraud considerably reduced. NASDAQ and Australian
Securities Exchange are some of the entities who look at blockchain solutions to cut costs and
improve efficiencies.

Blockchain Services for IoT and AI:

Blockchain is redefining how trusted transactions are carried out. The internet is itself highly
vulnerable and Blockchain is out with a solution to address it. One problem that Blockchain solves of
AI and IoT is security fault lines. Most IoT devices are connected with each other via public networks
and it is needless to say how vulnerable public networks really are. Blockchain solves this problem by
linear and permanent records which are indexed and can be created. Globally, general people can
reference them without censorship. They can also smoothen the commerce process by providing a
payment mechanism as well as a communication channel. The people are the authority and not any
centralized entity as in the case with banks.

Any kind of hacking, tampering with data, for example taking control of device and records is
impossible due to the way blocks are stored and guarded in a specific database in the Blockchain
system. Every IoT device is a point of vulnerability and the risks are higher as even AI is involved in
making decisions for users. Blockchain can thus be used to provide a secure, scalable and verifiable
platform that has invincible security implementations.

The success of IoT and AI will not depend on the capability of the technology, but rather on the
security provided to data. It is nothing but a science exhibition, where the prowess of AI and IoT
devices are displayed without the security needs being met. Hence, security is the main criteria to be
fulfilled, if these technologies can hope to really take off in large way. Each of these technologies can
leverage the strong points of each other, pave way for a vision where devices are securely
transacting with each other and making use of Blockchain technology where the data is processed
through AI and Machine learning technology.
Transforming the Healthcare Industry with Blockchain:

Less than 5% CIOs and only 12% of the industry executives have blockchain projects in their
technology roadmap today. That is why, we need to understand the realistic applications of
blockchain in healthcare, and it’s potential for the future.

Here are five ways blockchain can benefit healthcare:

1) Single and longitudinal patient records

Longitudinal patient records compiling episodes, disease registries, lab results, treatments can be
achieved through blockchain, including inpatient, ambulatory and wearable data,assisting providers
in coming up with better ways of delivering care.

2) Master patient indices

Often when dealing with healthcare data, records get mismatched or even duplicated. Also, different
EHRs have a different schema for every single field coming up with different ways of entering and
manipulating the simplest data sets. With blockchain technology, the entire data set is hashed to a
ledger, and not just the primary key. The user would look for the address and there can be multiple
addresses or keys, but they will all yield to a single patient identification.

3) Claims adjudication

Since blockchain technology works on a validation based exchange, the claims can be automatically
verified, where the network agrees upon the way the contract is executed. Also, since there is no
central authority, there would be fewer mistakes or frauds.

4) Supply chain management

Blockchain based contracts can assist healthcare organizations in monitoring supply or demand
cycles throughout its entire lifecycle. For instance, how is the transaction taking place, whether the
contract is successful, is there any delay.

New industries like Real Estate at the forefront of adopting Blockchain

A real estate transaction does not conclude without both the parties, which means seller and buyer,
both agree to transfer the title and payment to each other. The process requires certain legal
documents, without which the whole process of the transaction remains incomplete.

In the present scenario, it is impossible to complete a real estate deal remotely if these two parties
are based at different places, because those documents are warehoused at different locations,
moreover there is no synchronisation whatsoever in scrutinising them. With the help of blockchain
protocol, this can be done pretty swiftly, as the information can be retrieved from a centralized data
source and updated in real time at different nodes.

In conclusion, I have given a few examples of the industries where blockchain is disrupting the way
we do business and transactions in a more transparent and secure manner. Blockchain is a
technology which will surely work in the future, however we have to simplify this system to
understand the technology better. We can therefore say, still being in a nascent stage, there is
extensive research globally to expand the footprint of blockchain in virtually all spheres of industry.