Banks and Insurances are up to speed with Blockchain
There are many experiments, and development projects on-going right now, especially in the banking and the insurance industries.
In an article from the Harvard Business Review, Alex and Don Tapscott (1), describes a global financial system that “is rife with problems, adding cost through fees and delays, creating friction through redundant and onerous paperwork, and opening up opportunities for fraud and crime”.
They explain later in their article that most banks are therefore investing a massive amount of money in the Blockchain, in order to “reduce friction and costs”. Naming for example Santander that is estimating cost reduction in the sector to up to $20 billion a year.
The topic is so hot, that big banks (including Santander and BBVA) have teamed up with leaders in the IT sector (like IBM, Intel), start ups specialized in the Blockhain technology and major consulting companies (i.e Accenture), in order to “create a standard version of the Ethereum software, that businesses around the world can use to track data and financial contracts”. So says Nathaniel Popper in the NY Times (2).
Different Blockchain based computing platform are being developed, one of those is Ethereum, that this alliance decided to bet on.
In the Expansion (Spanish version) (3), the author explains that the alliance targets “to make reasearch and development for standards and an architecture’s references with a special look at privacy, confidentiality, adaptability and security”.
In the insurance sector also this movement is going on, with huge impacts on the business model. As reported by Giulio Prisco in the Bitcoin Magazine (4), major insurances companies in the world teamed up in a consortium (B3i) in order to explore the potential use of distributed ledger technology. A representant of Generali, new entrant in the group, is confident that the Blockchain technology can help them to “mitigate risk and improve efficiency…the blockchain initiative is particularly important in insurance where the secure and efficient exchange of information can benefit from disruptive technology that could eventually lead to game-changing applications”.
In this sector, the Blockchain could be even more efficient if linked with Smart contracts. A Smart contract “automatically” executes when an occurrence appears.
------------------------------------------------------------------------------------------------------------------------------
REFERENCES
https://hbr.org/2017/03/how-blockchain-is-changing-finance by Alex and Don Taoscott
https://www.nytimes.com/2017/02/27/business/dealbook/ethereum-alliance-business-banking-security.html?_r=0 by Nathaniel Popper
http://www.expansion.com/empresas/banca/2017/02/28/58b5c923468aeb3d7d8b466b.html
https://bitcoinmagazine.com/articles/insurance-giants-generali-and-rga-join-blockchain-insurance-industry-initiative-b3i/ by Giulio Prisco
