BLOCKCHAIN: Technology of Today Redefining Our Transactions of Tomorrow

Harnath Babu, CIO, KPMG- India

Now-a-days we perform number core activities–from banking, business transactions to shopping – over the internet. Backed by the World Wide Web, mobile technologies and credit card systems, these transactions are growing exponentially with time. With such growth come a number of complexities, vulnerabilities and inefficiencies.

To address such challenges, the need is to have a payment network that is fast as well as helps establish trust and transparency. One solution that has been developed to address these challenges is bitcoin – a digital currency that is not monitored by a central authority is the much hyped cryptocurrency that is enabling a peer-to-peer multi billion-dollar global market of anonymous transactions.

Now think of a blockchain as a thread underneath all the transactions – connecting and recording everything that happens online – the way we buy and sell goods, the way we share information and the way we exchange money – exactly as it occurs. Then the thread stitches all the information into an encrypted chain with different blocks scattered across a worldwide network of distributed systems that can never be altered. It is just like a traditional ledger, having an encrypted block of code that contains the history of every block that came before it with time-stamped transaction data. As an example, it is easy to steal a cookie from a jar, kept in a secluded place rather than stealing it from a jar kept in a marketplace – which is a stack of jars observed by a number of people.

Blockchain and Its Impact on Several Industries

According to Thomson Reuters 2016 Know Your Customer (KYC) Survey, financial institutions spend somewhere between USD 60 million to USD 500 million every year on compliance with KYC and Customer Due Diligence (CDD). Thus as an effort to increase efficiency and reduce costs, banks are leveraging blockchain technology to enable independent verification of one client by an organization to be accessed by other organizations so the KYC process doesn’t have to start over again.

In a similar fashion, healthcare providers maintain medical records digitally or in a cloud-like environment that can be accessed by a limited group of people. To help ensure centralization while maintaining utmost data security, blockchain helps manage comprehensive medical history of each patient with control given to the patient, hospitals, insurers, regulators and other parties.

In another example, supply chain and logistics companies are building smart contracts for tracking of import and export of goods from a port – helping to create a secure and reliable flow of goods that can be achieved efficiently and quickly.

As a breakthrough technology, blockchain is also transforming the way we buy and sell property these days. While buying a house means signing a pile of documents from different stakeholders, deploying blockchain means carrying out the transactions via smart contracts –which are the digital rules that process agreements and any specified conditions – ’if this, then that’. One classic example of smart contract is a coffee vending machine. Unlike a human being, the machine behaves by using an algorithm and follows the same instructions every time in every case. Once you deposit money and make select Latte, it would get released. There is no possibility that the coffee vending machine would not feel like complying with the contract, or partially complying (unless it gets broken).

The blockchain technology is also impacting the insurance industry rapidly. It is now being leveraged to manage trust and verify data in insurance contracts like the insured person’s identity.

These are just a few examples how blockchain is disrupting several industries, especially financial services, healthcare, supply chain, insurance and real estate. It is poised to build a more prosperous world where people get to participate in the value that they create. Not only this, it is set to completely change the way we maintain records, enforce business contracts and execute transactions. After all, trust is foundational to all businesses, and blockchain enables companies to establish trust and transparency.


Though wide-scale adoption of blockchain may be 5 to 10 years away, I must say that this technology has a bright future. As an open-source, real-time and trusted platform that securely transfer data and value, it can help several industries in not only reducing the cost, but also creating new products and services that can further generate new revenue streams.

One of the biggest keys to turn blockchain’s potential into reality is a collaborative effort to create a global network. All the industries must look at the bigger picture to help define the backbone that can underpin a universally-accepted global record and payment system that can transform how contracts are written and transactions are executed.

Now as blockchain technology continues to evolve and gain momentum, it can be a great opportunity to improve customer service, derive new business value and minimize fraud.