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Singapore - Taking a Lead in Leveraging Blockchain to Drive Trust
By Mark Rakhmilevich, Senior Director of Blockchain Product Management, Oracle
Our world today revolves around data. This is hardly surprising given that 90 percent of the total data around the globe today has been created in the past two years alone – and the amount is rapidly increasing. For organisations, especially governments and key public institutions like banks, to be successful in harnessing this data to positive effect, trust of those data sets is critical. As key custodians of the public records and our finances, these institutions have an important as well as herculean task ahead, especially given the rising open data movement.
Key challenges exist. One is around the siloed nature of data, in that most organizations have this precious asset fragmented across departments in self-limiting IT systems that inhibit data sharing both internally and beyond.
Another is around the ability to have a system of record that shows what data has been accessed, and why, by whom, and to what effect, for example, has it been tampered with or changed?
A further hurdle is to make data and this type of information open and available to third parties, who you may or may not know. This is increasingly critical in today’s digital and loose coupled world of ecosystems and consortia.
Given the immense pressures to digitise and transform, how can organisations navigate these challenges?
There is an emerging technology on the horizon, blockchain, also known as Distributed Ledger Technology (DLT). This promises to offer help in a number of ways: it can change the way data or value are rapidly exchanged between departments and institutions with stronger trust and traceability; it can shorten the cross-organisation process cycle, creating value over transaction; and simultaneously reduce cost and compliance burdens.
Recognising these benefits, already a number of key institutions in Singapore are taking rapid digital strides with blockchain technologies, with the goal to make better decisions to drive business innovation, and welfare for citizens.
One of the most prominent uses has been by the Monetary Authority of Singapore’s (MAS) trial around the digitisation of the Singapore dollar as data on a blockchain for interbank payments. It showed the possibilities of implementing such a payment system using blockchain and benefits around the reduction in processing times, fees and intermediaries.
Powering cross-border trade
DLT has been trialed to help drive greater cross-border trade, by enabling digital data exchange between logistics companies, government agencies and trade financing parties.
Another high profile pilot was the creation of a Know Your Customer (KYC) blockchain. A complex and highly regulated financial process aimed at helping combat money laundering and the financing of terrorism, it sought to enable financial institutions to collect, confirm and securely share customer information within a distributed network. Allowing customer details to be more easily validated, and the validation process itself to be stored, the result dramatically reduced the duplication of information, manual checks required, and errors, and helped streamline auditing and regulatory reporting.
DLT has been trialed to help drive greater cross-border trade, by enabling digital data exchange between logistics companies, government agencies and trade financing parties
Charting the Road AheadThese projects are just the start. Already there is talk about Singapore being amongst several countries that are piloting the use of DLT to create a national identity system. Another initiative in progress is the creation of a “regulatory sandbox” for financial institutions and Fintech companies that is intended to create a safe and conducive space for innovation, within which the consequences of failure can be contained.
Blockchain coming to life
Outside of Singapore, we are seeing other blockchain projects trying to achieve similar results.Oracle’s blockchain cloud platform has helped Arab Jordan Investment Bank minimise the complexity of electronic fund transfers by reducing cost, increasing efficiency and security levels, and ultimately improving the overall customer experience.
CargoSmart, a global shipment management software provider based in HK, teamed with Oracle and multiple ocean carriers to develop a blockchain solution for maritime shipment documentation. This solution uses Oracle’s blockchain cloud platform to establish a trusted digital thread for managing shipment documentation for the ocean shipping and logistics industry, creating a single source of truth for shippers, forwarders, carriers, terminals, and customs agencies to collaborate more efficiently.
However, blockchain is still a very nascent technology with significant skills shortages. Gartner recently highlighted in a survey that close to a quarter of these 293 CIOs surveyed found blockchain requires the most new skills to implement. These are exacerbated because the previous solutions on the market required complex developments to integrate blockchain into existing business systems. It also had challenges around meeting enterprise standards in resiliency, performance, and security. There were additional concerns about the rapid evolution of the technology often without backward compatibility required in most production environments – a concern with pure open source software in general, and with regard to blockchain in particular.
Enterprise software companies have been working on solving these challenges and simplifying customer adoption of blockchain in enterprises and public sector agencies. To drive take up further and bring these benefits to fruition, both public and private institutions need to come together with the right partners and adopt the right technology solutions for them to reap the inherent benefits of blockchain. While this is by no means an easy task, increasingly there are new, easy to adopt enterprise-grade, cloud driven, blockchain solutions that can offer ease of rapid app development, integration, strengthened security and scalable infrastructure. This will enable Singapore to leapfrog towards its goal of becoming truly ‘Smart’, especially in the provision of citizen services and data security.