Genie in the Lamp Perspective of Encore Theme on Blockchain –To Rub or not to Rub?
- July 3, 2017
- Posted by: EncoreAdmin123
- Category: Finance & accounting, Uncategorized
Published in Elest BFSI Post Magazine
Blockchain is touted to be the proverbial Genie in the Lamp – a thing of wonder that has magical capabilities. The excitement surrounding Blockchain is there for all to see. The FINTECH industry is abuzz with frenetic activity and it has turned Blockchain from just a buzz word to almost a cacophony.
Some of the companies that are either adopting, or even developing solutions using Blockchain are consulting the industry experts to define how to implement it. An exercise that is intended to inherit the privacy and security structures of legacy systems, has inevitably resulted in faults and inefficiencies. Many such efforts by companies to build ‘consortiums’ have neither been constructive nor have produced game changing products.
Many are jumping onto the bandwagon, some for the right reasons – to align themselves to a new order that might emerge, but several others are doing it with the fear of being left behind. What is required today, however, is a revolutionary way of re-thinking the fundamentals of trade.
By proactively questioning every activity and validating its relevance in context of technological developments. We can create amalgamated products that truly serve users.
As the Blockchain technology has been developed from scratch, the applications it is dealing with must also follow the similar frame of developed. True solutions will come only from those who are at arm’s length from the industry. People who know the needs and are not yet entrenched in the bureaucracy.
Before we jump on to the bandwagon, we must understand technical definitions of the beast; Blockchain.
It is a ground-up technological breakthrough developed through research and application and not an industry defined solution: Research and development of this technology should continue to be ground-up instead of industry (ies) defining the parameters of technology development, hence, the move by IBM to entrust the Linux foundation to co-ordinate and standardise opensource code that will be the Hyperledger Project is the most appropriate move to unleash true potential of Blockchain.
Blockchain is not one, but a combination of at least four existing technologies to create a unique combination that has created a system that is accessible, opensourced, transparent, robust, secure, and trust worthy, designed purely for the digital world. We believe that one has to preserve every characteristic of Blockchain as envisaged by the original developers to truly leverage its benefits.
It is an organic system, exact opposite of a hierarchical model . For example, Bitcoin is built on the paradigm of Social Infrastructure, Social Cost, and Social Profits. Whereas legacy systems are built on Private Infrastructure, Private cost and Privatised Profits. While it is apparent, a truly social application is not tenable to the industry, the arrival of such a socialised system is a gamechanger and even implementing aspects of it will be revolutionary.
By nature,Blockchain is a distributed database with identical copies of the ledger synchronised and updated with consensus and it does not contain a centralised decision making organisation.
By being an immutable ledger of all events, it enables to digitally transact and maintain a full record of the transfer of value.
Having seen the characteristics of a Blockchain, it is worth looking at the challenges faced by the FINTECH industry as a whole. An industry that employs a legacy system adopted and incrementally evolved from its roots in the medieval ages, that has inherited every problem of physical banking.
Hub & Spoke Model that limits access & interoperability
Trust Deficit based Multiple Validation & Intermediaries, hence grossly inefficient
Hierarchical decision making resulting in Time delay in settlements
Centralised record Keeping, hence costly to maintain with redundancies while being vulnerable to service failures and attacks
Maze of Regulations and difficulty to comply with statutory obligations
Lack of Transparency
In short, it is an industry that is ready for disruption. While everyone agrees that Blockchain is ‘that disruptive technology’, it will also do us good to understand how disruption happens.
Every innovation or every new technology has the potential to be a disruptor, if, the right company builds products that leverage the technology to change legacy structures to reduce cost (to almost Zero); improve efficiency; reduce middlemen (Direct to consumers); increase transparency; build trust and social validation; empowering users by providing open access.
Examples of which can be seen how, Skype disrupted Telecom (Telephone) more than Mobile Technology. Twitter, Facebook and YouTube disrupted the news industry more than the internet.
Amazon and Alibaba disrupted the Retail Marketplace (Hub & spoke model) by changing the volume game to value and access driven.
Given this scenario, Encore Theme Technologies (ETT) has embarked upon a journey and has set itself on a path to build Ground up solutions for the FINTECH Industry on Blockchain.
Encore Theme has a set of policies underpinning our design and development of Blockchain solutions.
Enable everyone in the ecosystem to adopt / subscribe to the technology.
Build end-to-end automation and minimise human interventions.
Eliminating physical movement of documents.
SMART handling of regulations and compliance.
Seamless co-ordination and updation.
Always updated Transaction status dashboards.
Enabling Data-science driven Financial Services.
With our expertise in providing solutions to the industry for over a decade, Encore Theme is currently developing and/or implementing solutions for the Trade Finance ecosystem, Supply Chain Finance ecosystem & marketplace, Home Finance marketplace & management. Each solution is capable of being configured to run alone or be integrated with existing systems for each participant.
Solutions for Trade Finance ecosystem are being developed under the Name “ThemeChain”an end-to-end cross-border trade solution, with over 11 participants being included in the ecosystem. It includes the Importer, Issuing Bank, Advisory Bank, Exporter, Central banks, Shipping Agents, Customs on either side & Insurance Agents. The solution is designed to be deployed and adopted by the whole ecosystem and will be fully KYC and AML compliant, with validation powers and transparency for regulators. It is designed to minimise human intervention, and aims to reduce what is traditionally a 12-stage process to a 3- stage process with the implementation of smart contracts.
ThemeChain is optimistic in its strategy to onboard all participants, being confident on the utility and benefits it provides to each participant.
Overall, we are sure, that the Genie in the Lamp – that is ‘Blockchain’ is well within its potential of transforming this world, and the industry is today at a cusp… to rub or not to rub.