Blockchain technology will enable financial transactions to take place quicker and provide an undisputed version of the truth for all parties to a transaction, Darrel Orsmond, Financial Services Industry Head at SAP Africa, said in a statement on Tuesday.
He said that this has fundamental consequences for the way the financial services industry operates.
However, much like the internet in its early days, Orsmond argued that the true value of Blockchain – and its potential uses – remains largely undiscovered.”
Blockchain will improve trust and provide transparency to business processes running across multiple participants.
“All relevant information will be available to the parties involved in the transaction, securely and reliably. This has applications beyond financial transactions: for example, in proving property ownership in rural areas where other official forms of proof-of-ownership may be absent,” he said.
The blockchain is a distributed digital ledger that uses specialised algorithms to ensure that transactions are valid and authentic.
It is based on a decentralised architecture and protected by powerful digital encryption. As such, Blockchain can supplement trusted third parties, like banks, in guaranteeing transactions and coordinating agreement among parties.
However, for the technology to be adopted in the mainstream, all players – financial services companies, regulators, governments – need to agree on certain standards.
SAP is currently developing specialised software for customers across the banking, agriculture, energy, healthcare, and media industries to enable them to connect Blockchains to its HANA Cloud Platform.
In one case, SAP is using Blockchain software to let patients share electronic medical records with doctors or drug makers for a specific time-period, during medical care or a study. Another project managed to transfer funds between a Canadian and German bank using Blockchain, reducing the transfer time from a few days to only 20 seconds.
“This technology has such potentially far-reaching implications that it may still take some time before the right kind of unifying innovation emerges. The immediate opportunity lies in the ‘white spaces’, aspects of business or transactions that are not encumbered by onerous regulations and standardized processes. For example, by using geolocation and validating the information through public records, an individual could create a record of their ownership of a piece of land even in rural areas, where other forms of proof-of-ownership are scarce or nonexistent,” said Orsmond.
The technology has the potential to transform the way transactions – and business – are conducted, but that it may take some time yet to reach that stage of adoption.
“Technology companies and innovators will have to accelerate the adoption of Blockchain by creating useful and accessible applications thereof, much in the same way as companies like Google, Amazon and Facebook accelerated the adoption of the internet by creating new ways of delivering value to businesses and people,” he said.
It will be necessary for common standards to be adopted to make this possible.
Orsmond will be discussing the opportunities around Blockchain at the third annual Blockchain Africa Conference taking place in Sandton, Johannesburg from 1 to 3 March 2017.
The blockchain is the most significant new technology of the decade.
“We are very excited that SAP is sponsoring the Blockchain Africa Conference 2017. This shows that leaders in software and technology solutions have identified the significant opportunities of Blockchain and are now adopting this new technology and that it is becoming more and more widespread,” said Sonya Kuhnel, co-founder of Bitcoin Events, organizers of the Blockchain Africa Conference 2017.