IBM is continuing its blockchain push
Tech giant IBM has been working on making itself a global leader in developing blockchain use cases for financial services, and on Wednesday, it announced yet another project.
IBM will develop a blockchain-based supply chain finance solution with Mahindra Group, one of India’s largest conglomerates, according to Bezinga.
The new platform will use a permissioned blockchain and be designed to optimize processes involved in supply chain finance, with particular emphasis on invoice discounting.
Supply chain financing is typically laborious. Many transactions between suppliers, buyers, and any financing parties involve paper invoices that have to be mailed and require the manual inputting of documents into each participant’s respective system. This greatly increases processing times and the risk of human error.
Blockchain technology is well placed to help mitigate both issues as it can be used to create a shared, immutable ledger that each participant can update instantly, while also limiting each party’s access to the parts of the contract related to them. This can reduce human error and operating costs, as well as ensure transparency and the protection of sensitive data.
IBM has long been upping its blockchain offerings. It’s been particularly focused on producing real-world applications for the technology — including in the areas of financial services and trade finance. IBM has made open-source contributions to the Hyperledger Fabric, and in April, it made blockchain services available to its IBM Bluemix cloud users so they could build and test blockchain-based solutions.
We think it likely that its real-world approach will give IBM an edge over groups or consortiums working on blockchain technology. In addition, its structure is less fractious, which may make it easier for the firm to specialize and focus on particular use cases.
Blockchain technology, which is best known for powering Bitcoin and other cryptocurrencies, is gaining steam among finance firms because of its potential to streamline processes and increase efficiency. The technology could cut costs by up to $20 billion annually by 2022, according to Santander.
That’s because blockchain, which operates as a distributed ledger, has the ability to allow multiple parties to transfer and store sensitive information in a space that’s secure, permanent, anonymous, and easily accessible. That could simplify paper-heavy, expensive, or logistically complicated financial systems, like remittances and cross-border transfer, shareholder management and ownership exchange, and securities trading, to name a few. And outside of finance, governments and the music industry are investigating the technology’s potential to simplify record-keeping.
As a result, venture capital firms and financial institutions alike are pouring investment into finding, developing, and testing blockchain use cases. Over 50 major financial institutions are involved with collaborative blockchain startups, have begun researching the technology in-house, or have helped fund startups with products rooted in blockchain.
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Source: IBM is continuing its blockchain push | Business Insider
