In my last blog, we reiterated the definition of blockchain — “a distributed, decentralized transaction ledger saved by each node in the network, a peer-to-peer system with no central authority or database which manages the transaction flow” , and discussed the many ways that financial institutions can plan for and capitalize on blockchain, looking specifically at use cases in insurance, remittance, asset management, trade finance, and know your customer (KYC).
In this final blog of the series, we’ll look at the benefits of leveraging blockchain-as-a-service (BaaS). Blockchain-as-a-service provides a rapid, low-cost, low-risk, and fail-fast platform for financial institutions to collaborate by experimenting with new technologies and new business processes. Open source provides an ideal platform for this collaborative effort, well suited to advance blockchain technologies in the financial services industry. Offering the service can allow developers to experiment, learn, and fail fast at a lower cost in a ready-made development / test / production environment, allowing teams to move from proof-of-concept (POC) to production more rapidly with a flexible and scalable platform.
“…the sense of scale inside the blockchain industry is that the changes coming will be “as large as the original invention of the internet.” - Harvard Business Review
Blockchain shows significant promise for emerging fintechs to break down traditional barriers and remove friction from the value chain. Based on its very definition, blockchain will be able to accomplish this through the trust that is explicit in the centralized ledger. Trust in the financial system has always been critical, and just as trusting traditional financial institutions to safeguard accounts, extend credit, and facilitate payments has historically kept the wheels of commerce turning, the trust provided by a centralized ledger can fuel emerging fintechs. A great way to leverage the possibilities available in blockchain technology is to offer blockchain-as-a-service.
BlockApps is one of the leaders in the fast growing blockchain space. They are major contributors to the Enterprise Etherium Open Source Project, have over 1,000 projects in development, and have worked with over 100 customers on blockchain POCs or early stage production systems. BlockApps provides a cloud based developmental platform, STRATO, and consulting assistance to customers, offered on Red Hat Enterprise Linux and Red Hat OpenShift Container Platform allowing customers to build their blockchain applications on Red Hat's scalable enterprise ready products. BlockApps provides an easy-to-use scripting language that enables developers to create blockchain applications in hours.
Red Hat OpenShift Container Platform is positioned to be a platform of choice for blockchain infrastructure and solution providers. As announced in April 2016, Red Hat is working to meet the needs of fintech startups and financial services independent software vendors (ISVs) who are developing blockchain applications and technologies. The OpenShift Blockchain Initiative is designed to help financial services industry customers build hosted blockchain solutions, while Red Hat manages container application deployment and support through the single-tenant, cloud-based OpenShift Dedicated.
Using OpenShift Dedicated, fintech startups, ISVs, and financial institutions can explore blockchain-based cloud services that use open source technology to develop updated transactional applications that can help streamline business processes on a transparent and more secure platform. Through the new OpenShift Blockchain Initiative, ISVs will be able to gain access to the OpenShift Dedicated environment, training workshops, enablement materials, go-to-market activities, and OpenShift Commons membership.
As we've discussed in this series, the possibilities for blockchain technology to enable innovation within the financial services industry are endless. With BaaS, we can rapidly develop, test, and deploy blockchain applications for distributed ledgers. Financial institutions will undoubtedly find ways to use artificial intelligence (AI) and blockchain together to more efficiently analyze and store big data. This could then be used as an enhanced platform to manage the enormous amount of data associated with billions of connected devices on the Internet of Things (IoT).
Please let us know your thoughts on blockchain, and any initiatives your organization might be involved in, in the comments section below.