The intersection of blockchain technology and big data has been a focal point in recent discussions within the financial technology (fintech) sector. Sharat Chandra, Founder of EmpowerEdge Ventures, explored the transformative potential of blockchain and Distributed Ledger Technology (DLT) in revolutionising data integrity and security.
Sharat Chandra emphasised the significance of blockchain's development over the past two decades. "Blockchain technology has multiple use cases," he stated. "It is pivotal not only in the digital currency domain but also in creating a single point authenticated digital registry and a robust carbon credit system."
Blockchain and its impact
Raktim Singh, Senior Industry Principal at Infosys Finacle, highlighted the practicality of blockchain in specific scenarios. "Blockchain is very helpful wherever there are high-value, low-volume transactions," Singh noted. "Similarly, it is suitable for situations involving many disparate parties, such as multiple companies or employees." He pointed to identity security, insurance, and digital currency as prime areas where blockchain can provide cost-effective solutions.
C Ravi, Senior Director at LTIMindtree, identified four key areas where blockchain is making substantial contributions, digital data registry, digital infrastructure, marketplace, and digital payments. "In the digital data registry, blockchain creates a single point source of all data," Ravi explained. "For digital infrastructure, it facilitates Know Your Customer (KYC) processes and document records. In the marketplace, blockchain supports a robust business ecosystem, and in digital payments, it plays a crucial role for fintechs." Ravi also underscored the importance of blockchain in recording carbon data and establishing carbon registries for businesses.
Compliance And Governance
Ritu Verma, Head of Regulatory Compliance and Governance at PayGlocal, addressed the gap between the existence and adoption of blockchain technology. "The acceptance of Central Bank Digital Currency (CBDC) depends on its integration into the financial ecosystem," Verma stated. "Building the necessary infrastructure and regulatory landscape is crucial. Blockchain involves sensitive information such as KYC data and international transactions, so protecting this data from fraud, theft, and attacks is paramount."
Aparajit Bhandarkar, Managing Partner at Varanium Nexgen Fund, provided a critical perspective on blockchain's economic viability. "Many venture capitalists are sceptical about cryptocurrencies, seeing them as akin to a large Ponzi scheme," Bhandarkar remarked. "Blockchain technology is expensive, and its application often does not make economic sense. High-value, low-volume use cases can be effective, but emerging technologies are frequently mis-sold to corporations and governments. For instance, the Odisha government is investing Rs 400 crore in blockchain technology. I hope these funds are used judiciously."
Future With Fintech
Deval Sheth, Managing Director for Asia Pacific at Ultimaco, discussed the two main groups adopting blockchain, those involved in regulations and audits, and victims of cryptocurrency fraud. "The Payments Council of India mandates a secure system to protect against external and internal attacks," Sheth explained. "The goal of using a CBDC is to replicate the experience of using cash, which requires robust protection against backdoor attacks."
The panel discussion highlighted both the opportunities and challenges associated with blockchain and DLT in fintech. As blockchain continues to evolve, its potential to revolutionise data integrity and security remains a critical area of focus for the industry.
This panel discussion was taking place at BW Businessworld's Festival of Fintech 2024.
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