Yahoo Founder Bets on Blockchain for Banking
While trust in cryptocurrencies such as Bitcoin might be flagging, Jerry Yang, the co-founder of one of the world’s most popular internet search engines, Yahoo, announced at Singapore’s recent Nikkei Innovation Asia Forum that if trust around blockchain technology can be built, “huge amounts of doors” could be unlocked for the banking and finance sectors.
Despite the bearish Bitcoin market, Mr Yang says that blockchain “continues to be the accelerator, both for the great good and for greater division”.
Yahoo isn’t the only internet search engine giant to show support for blockchain-related technology. Back in March 2018, Google began working on blockchain technology to support its cloud business in a bid to stave off the competition.
Software giant, Microsoft, is also pushing new blockchain products which it hopes will give its customers more control over their personal data. One of the products that the company is rumoured to be working on is an “identity hub” (N.B., a type of encrypted personal data store) which would be offered to consumers through Microsoft’s cloud computing service, Azure. The identity hub would need the user’s permission for third parties to access it and, therefore, reduce the age-old risk of people’s identity information being shared with third parties without their knowledge or consent.
The second blockchain project that Microsoft is said to be working on is a “wallet-like” application that allows users to manage who can view their data, and also lets users revoke access permissions if desired.
Whether the banking industry will come to embrace blockchain as Jerry Yang has predicted is a different matter. Banks (as well as the finance industry as a whole) have long been averse to adopting blockchain technology as it effectively removes the control that they have over their customers’ funds and accounts.
However, it seems that attitudes are slowly changing, with China being an excellent example. Twelve of the country’s twenty-six publicly listed banks (including the Bank of China) have already adopted blockchain technology.
Elsewhere in the world, other financial institutions have been dipping their toes in the water, including Russia’s ALFA Bank, New Zealand’s LatiPay, Australia’s Commonwealth Bank, and Singapore’s UOB.
Last summer, the UK’s second-largest bank, Barclays, applied for two patents as part of its ongoing commitment to improving account security. One of the patent applications included details of blockchain platform which allows for cryptocurrency transfers. The proposal also outlined the potential to streamline Barclay’s existing know-your-customer process through the storage of identifying information on a private blockchain. The second patent suggests that blockchain technology could be used to help transfer digital currencies between the payee and their chosen recipient.
Lloyds and Santander have also previously collaborated in a blockchain proof-of-concept project run by Swift (the Society for Worldwide Interbank Financial Telecommunication) to support the accounts that they have in other countries. The project allows the banks to make cross-border payments in real time which, in turn, means that they have a more accurate idea of how much money is required in each account at any given time, and allow the banks to free up funds for other investments.
By Laura Kilby