Industry leaders, Sankarson Banerjee, CTO Projects, NSE, and Mrinal Chatterjee, Director Technology – India Payments, Amazon.in, discuss the transformation this digital medium will unleash. By Satyaki Sarkar
Sankarson Banerjee, CTO Projects, National Stock Exchange of India Ltd
“When it comes to the BFSI and NBFC industries, I think blockchain is going to have a great impact. The use of cryptocurrency for cash transfers, establishing digital trust between parties, and securely exchanging data sharing across company boundaries, among others, will all benefit from the technologies perfected through blockchain. Banking has two principle parts; the first is asset and risk management, which requires human judgement and as such is unlikely to get much disrupted with blockchain implementation.
“The second part is the transactional part—the tracking, storing and movement of assets—this will see the biggest impact. This is because blockchain has the potential to disintermediate the transactions in a naturally auditable, secure, and resilient fashion. The digitisation of banking transactions has already started but blockchain makes it a lot more efficient. It is going to create enormous disruption since banks today earn a lot of fees through these transactions, which are quite complex to make in a reliable, consistent fashion using traditional technologies. Those processes will get disintermediated, and there will be no need for the multiple third parties in between.”
“The insurance sector will also be affected; it also has a number of transactional processes that can be disintermediated. However, the bigger part of the industry, such as the pricing of policies, investments, etc, will remain largely unaffected. Financial information industries that are essentially central ledgers today, such as Master-VISA networks, money transfer networks and more may also be disrupted.”
“A noteworthy blockchain provider is Chain.com, which has been implementing a number of live use cases along with Nasdaq. Estonia has started a pilot using blockchain for proxy votes on company AGMs. The potential exists to use it for voting during elections, which could increase participation and decrease any chances of technical tampering or fraud.”
Mrinal Chatterjee, Director Technology – India Payments, Amazon.in
“Blockchain promises the kind of solution that the world needs especially as more enterprise and personal transactions are moving to digital. This is especially true in India, as not only the consumer, enterprises but even the government wants to move more and more transactions to digital. Digital transactions allow a country like India to scale its operations and services. However, though the desire of moving to digital transactions is high, we also need to worry about securing our transactions from malicious or accidental tampering and loss. This is where I believe blockchain as a technology has high leverage. As I understand it, blockchain offers the promise of tamper-proof and distributed nature of storage and distribution. If we do not implement security in the heart of digital transactions like banking, taxes, personal identification (AADHAR digital ID), etc we will loose citizens’ trust on digital transaction.
“I personally feel India does not need a new currency, like cryptocurrency, but needs to enable current currency on crypto platform. Enabling rupee transactions to seamlessly ride the cryptocurrency platform will allow for more secure transactions whether they are wallets or banking transactions.
“The biggest benefit of blockchain will be complete transparency, and elimination of middlemen, even in overseas transactions. Customers can monitor every aspect of their transactions and be completely assured of security. This in turn, will create a lot of value in banks, leading to an increase in revenue. Blockchain will definitely change the future of monetary transactions and banking. The biggest difficulty will be in transition from the existing technology to the new one, in terms of compatibility and migrating banks’ decades old data into a new system.
“I’m still apprehensive about bitcoins though, because while it gives you privacy and security, its non-traceable nature means there’s potential for misuse by cyber criminals. There needs to be some amount of regulatory oversight on cryptocurrency transactions to ensure adequate consumer protection and traceability of the transaction. I suspect a secure public blockchain network would genuinely help maintain the integrity of the transactions.
“There are so many possible uses of such a technology besides currency, like securing identity, supply chain transactions, company records, etc. Organisations will not want to have security implementation leveraging the public blockchain platforms. Enterprises need to review where they see highest leverage and whether a public or private blockchain implementation is the best option. Besides privacy concerns, companies also needs to look at blockchain from a business point of view. The level of security it provides has to be robust enough to warrant the costs incurred.
“Blockchain also has huge potential in the medical sciences and the healthcare industry. Patients’ medical records are highly sensitive and need to be regularly updated and accurately maintained. Blockchain would make them secure and easily accessible to patients, doctors, and whomever the patients want to share them with.”