Standfirst: Big investments from blue-chip names and innovative organizations in emerging markets tell us that blockchain will be a foundational technology in a global, connected business ecosystem. It’s time for you finance function to take a look, says Dee Houchen.
“Keep it simple, stupid.” It’s a time-worn phrase. But as global supply chains become more complex and businesses need to boost agility, it’s one we come back to time and again.
Blockchain is one technology that holds out huge promise for this simplicity revolution. At the most basic level, a blockchain is a just a database. But each entry is recorded permanently. The database is hosted across several locations (mostly in the cloud) – with no party having more administration rights than any others. And it’s cryptographically secure. Both sides can see any transaction, and it can’t be tampered with later.
That’s one reason banks have been investing heavily in blockchain innovation. They’ve recognised that it’s both an opportunity to speed up and make secure payments systems – and a challenge to their existing business model.
Blockchain databases do much more than just store data. We’re already seeing businesses use “smart contracts” – applications immune from tampering, running on a blockchain – to manage transactions automatically. When an event, such as a delivery or a timesheet, is recorded, the smart contract automatically triggers, say, a payment or notification.
The use cases for corporate finance functions are no less compelling than for banks.
• Payments can be streamlined, simple and secure – and the centralized, permanent ledger leads to less complex auditing.
• Identity management and know-your-customer requirements are easier on shared ledgers. There is consensus on counterparties and events.
• Settlement of financial instruments is simpler and more reliable.
It’s going to accelerate digital transformation in the finance function, freeing up human talent to focus on higher-value work, not processing or checking transactions. Result? A boost to productivity.
So where’s the catch? In simple terms, blockchain is not yet a mature technology. But the building blocks are in place. Standard protocols such as Hyperledger are up and running. That’s enabled Oracle to build the Autonomous Blockchain Cloud Service – offering plug-and-play blockchain capabilities that can be fully integrated into the Oracle platform. It’s an out-of-the-box solution – from management console, right through to security and beyond.
That simplicity is why IntellectEU is using Oracle to build its own blockchain solutions for new business ideas. Specialists like them – and big players like banks, insurers and governments – are exploring now to build applications that will redefine how we transact and store data in the future.
In a world where trust is paramount and businesses need to massively accelerate processes without sacrificing security, blockchain really is the simple solution to delivering your tomorrow, today.
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