Last summer, Fabian Vogelsteller from the Ethereal Project spoke about potential blockchain applications at the Tech Open Air conference in Berlin. He said that in the next five years we will see the rise of an “internet of blockchains” focussing on specific verticals or needs, such as industries as well as private blockchains within companies.
It seems the countdown has begun as ING has revealed that one if its teams has been working on 27 proofs of concept. Led by Mariana Gomes de la Villa, Senior Program Manager Blockchain, and her Amsterdam-based Blockchain Innovation team, the goal was to find practical applications for blockchain that would benefit the whole financial ecosystem.
“For us, 2016 was about experimentation and getting to know the technology: how it works, how we can use it and what the pitfalls and limitations are. This technology wasn’t built for the financial industry so there are constraints and it doesn’t always cover our requirements,” Gomes de la Villa said.
The team focussed on six areas of business: payments, trade finance, compliance and identity, lending as well as financial markets and bank treasury. One application targeted the know-your-customer process (KYC). With blockchain, ING said customers only had to submit identity documents just once as opposed to every single time they opened a new account. The bank said blockchain had the potential to reduce operational and compliance costs by as much as 15%. It could also increase bank revenue by the same amount.
However, the bank tempered any excitement by pointing out that because of the vast amounts of compliance and understanding required, it will be some time before blockchain becomes and everyday part of the payments ecosystem.
“Each solution should comply with many more areas: performance and scalability, the regulatory and legal framework, privacy and confidentiality. That’s also why collaboration with the business and external partners is so important,” Gomes de la Villa added.
A further £2.5m is expected to be raised from crowdfunding on Tuesday.
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