The State Bank of India, the largest bank in India with $460 billion of assets, announced Monday November 20 that it will launch two blockchain production-ready beta solutions next month. It is yet another indication that banks are welcoming blockchain tech. It intends as a solution to some of the problems experienced in the financial sector.
KYC blockchain solution – BankChain
The two solutions, namely smart contracts and blockchain-powered Know Your Customer or KYC named ClearChain, will be available for use by the 27 member banks that form India’s first financial blockchain consortium called BankChain. BankChain was established by the State Bank of India.
The smart contracts, which the bank says are “not regulatory heavy,” could, for instance, allow the automating of non-disclosure agreements.
“A lot of internal processes can be [smart] contracted,” SBI’s head of innovation Sudin Baraokar told Economic Times. “We do a lot of IT procurement, a lot of it can be implemented using blockchain.”
SBI said in earlier November that its KYC blockchain solution will run on Intel’s modular Hyperledger Sawtooth platform. KYC will allow banks to share customer information.
Blockchain tech and products will help banks to de-risk investment in emerging tech so that all banks can come and invest at once, and it helps them share knowledge and reduce costs.
“We can also use each other’s technical teams to take this forward. We focused on solutions that the bank does not have…things like smart contracts, which is not regulatory heavy.”
The two blockchain projects will be a major for Indian banks but will only be the first first blockchain applications for the BankChain. BankChain allows members to research, develop, and implement blockchain applications in the financial industry. And so there could be more projects in the coming weeks and months or years.
Indeed, apart from smart contracts and KYC, the consortium lists other ten “active projects”in the area of blockchain including cryptocurrencies, cross border payments and peer-to-peer payments.
SBI has also unveiled an innovation center in Mumbai whose role is to explore new technologies. Machanism like blockchain, artificial intelligence, machine learning, among others. It will host hackathons and incubate startups.
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