Recently, Joshua Kroeker, Blockchain Lead for Global Commercial Banking at HSBC, said that he hopes Blockchain will be commercialized at an enterprise-level next year. He also stated that in this space, the largest hurdle is how to attract more and more financial institutions, with clients wanting to choose platforms that best address their needs.
In the past one or two years, Banks and Financial Services has tested plenty of Blockchain application and many of them got incredibly successful, however, little or no application scaled for commercial launch.
HSBC is “A Fan of Blockchain”
When talking about applying the technology in the bank, the Director shared that separating blockchain from cryptocurrencies and tokens is “our biggest challenge”. Fortunately, clients in the financial services industry now “have a big leap” in understanding blockchain as “a network technology” and how it will impact the business.
Especially, HSBC has become the pioneering in using blockchain into the banking and financial industry with various successful projects and trials for the last two years. For example, the study team in Singapore traded iron ore successfully – from contracting to financing to the transfer of documents with paperless, shows “benefits of connecting different platforms to deliver end-to-end digitization”.
#TransformingTrade through #blockchain increases transparency, reduces transaction times and improves working capital efficiency. HSBC’s Sunil Veetil speaks to CNBC about our most recent successful blockchain transaction. https://t.co/lFZY0udoOu
— HSBC (@HSBC) June 25, 2019
Additionally, in September 2019, HSBC also finished the world’s first yuan-denominated blockchain-based Letter of Credit. Voltron, the platform to make the transaction, which was developed by eight banks, including BNP Paribas and Standard Chartered.
On the other hand, before that time, in May, the bank launched a letter of credit for US food and agriculture firm, Cargill, using blockchain technology. According to that, R3’s Corda platform, a blockchain solution for enterprises, was used.
Kroeker admitted Blockchain itself has a distinct appeal for incumbent players in all kinds of enterprise scenarios, not only banking.
“We know the technology works well and we’re extremely want to see a shift from industry testing and developing commercialization industry next year.”
Also, he added “having lots of experience with blockchain is an opportunity to us. We are looking toward offering the solution that acts as super-connector”. To success, Kroeker and his colleagues need to encourage traditional financial institutions as well as eco-system participants such as ports, customs, and insurers to adopt the technology and build interconnected platforms.
Commercialization Blockchain Really Looks Like What?
In 2018 and 2019, we can see leading banks to join some projects and cooperate to build trustworthy platforms. In 2020, the first wave of blockchain network will give commercial solutions and customers need to decide which ones “best solve their specific pain points”.
In reality, there are many other industries, not only the bank, have been testing the blockchain remedies and an array of them that are building their own exchange to manage common challenges. Further, HSBC is expecting a drive to interconnect these platforms.
Like many other banks and financial institutions, HSBC presently is working on its own blockchain solutions, as is JP Morgan Chase. Banks have used technology to enhance and streamline existing services while providing seamless settlements and trades.
#Blockchain technology has the potential to revolutionise #trade. Today we completed a trade transaction across two independently built blockchain platforms – merging the financial with the physical logistics of trade. We are #TransformingTrade. pic.twitter.com/ZIoamuWvtI
— HSBC (@HSBC) June 19, 2019
After all, what HSBC actually wants is to be able to launch the commercial offerings of the projects that have been working on with its partners to make sure its clients benefit as soon as possible.
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