Look at using blockchain for new revenue sources: IBM's Jitan Chandanani

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Jitan Chandanani , blockchain offerings and engagement leader at IBM India/South Asia, speaks to Advait Rao Palepu on the interest in blockchain technology.    

With active interest in blockchain technology, many companies are looking for solutions. Where do you see the biggest opportunity? 

Banking, financial services & insurance (BFSI) is where we see the biggest opportunity for the use of blockchain. Whereas for capital markets, at this point of time, there is no need for an alternative technology as the existing infrastructure in the country is very robust, so 'if it's not broken, don't fix it'. 

During the first four to six weeks, the developer conducts a business case validation, which could go on for eight weeks. From an initial list of 10 use-cases by the end of the business analysis period, we come down to three main use-cases, after which it takes another eight to twelve weeks to build the minimum viable product (MVP). Unless there is a ready-made asset or the client has a ready-made business case, for IBM, the first three to five months is fairly consistent. It is far easier to adopt blockchain from a technology feasibility standpoint but it takes time because of the inertia of current systems and the complexity of tasks. Once the pipeline between parties is created, the use-cases can be expanded. This is why the success of the first use-case is very important.

What should companies keep in mind before approaching blockchain developers?

Historically, a developer would offer a product to a company and say that it can perform 15 different functions; however, in the blockchain world, it's different. Companies that are excited about blockchain should look at what they can do beyond the initial two years. They should not just look for cost-optimisation but for new revenue sources as well. It is important for companies to create a governance framework for their blockchain platform(s) so that there is a point person to speak about any issues that need to be addressed by the developers and/or other members of the blockchain. There is a need for business understanding of the processes to be able to identity fault-lines.   

A key part of blockchain is its inherent transparency. What are your thoughts on the regulatory environment and the need for consent mechanisms?

Most of the use-cases, even in the insurance blockchain, which go to the citizens' level, require a built-in protocol and consent mechanism. For us, every use-case that requires consumer data or subscriber data is factoring consent in, and entities are also looking at this. Regulators in the finance and consumer spaces are encouraging blockchain use; therefore, we should ensure that the same regulations that exist for manual and physical controls are translated on to the blockchain for both regulatory bodies and consumers.