IBM Blockchain Usecase - Nov 2016
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Transcript of IBM Blockchain Usecase - Nov 2016
1© 2016 International Business Machines Corporation IBM Blockchain
IBM BLOCKCHAINRamesh Gopinath, Ph.D. VP, Blockchain Solutions and Research
2© 2016 International Business Machines Corporation IBM Blockchain
Blockchain is an emerging platform for transaction services�that will fundamentally change and reimagine the way we do business
ReducesTime
• Capital Markets– Securities trading /
settlement– Syndicated loans,
Commercial paper• Commercial Banking
– Trade Finance– Trade Logistics
PartyA’srecords
Bank’srecords
Auditor’srecords
PartyB’srecords
• Inefficient• Expensive• Vulnerable
Digitally signed, encrypted transactions and ledger
All parties have same replica of the ledger
PartyA
Bank
Auditor
PartyB
• Consensus• Immutability• Smart Contracts
• Provenance• Finality
T E C H N O L O G Y
I M P L I C A T I O N S
• Retail Banking– Payments: Cross border
remittances– Lending: Mortgage
contracts• Supply Chain
– Provenance– Logistics
RemovesCost
ReducesRisk
Enables NewBusiness Models
3© 2016 International Business Machines Corporation IBM Blockchain
Key Concepts and Benefits of Blockchain for Business
Transaction time from days to near
instantaneous
Overheads and cost intermediaries
Tampering, fraud & cyber crime
Benefits:
Smart Contracts
Permissions Shared Ledger
Consensus
Ensuring appropriate visibility; transactions are secure, authenticated & verifiable
Business terms embedded in transaction database & executed
with transactionsAll parties agree to network verified transaction
Append-only distributed system of record shared across
business network
Key Concepts:
ReducesTime
RemovesCost
ReducesRisk
Enables NewBusiness Models
IoT Integrationinto supply chain
4© 2016 International Business Machines Corporation IBM Blockchain
IBM’s point-of-view on Blockchain• Open source standard to lower adoption risk• Encourage Innovation through modular architecture• IBM Supports Linux Foundation’s Hyperledger project
• Privacy, confidentiality, auditability, performance and scalability. • Engage with governments and regulators to encourage the broad adoption of
blockchain in industry
IBM BLOCKHAIN is conducting business in 2016 across three areas 1. Community development of blockchain fabric (Hyperledger project)2. Cloud deployment which expands Hyperledger with value added features3. Client engagements and transformative solutions
• • Ensure greater trust by provisioning only permissioned members and users• Enable more optimized forms of consensus to keep the ledger in sync
BLOCKCHAIN ≠ BITCOIN
BUILT IN THE
OPEN
PERMISSIONED
ENTERPRISE READY
5© 2016 International Business Machines Corporation IBM Blockchain
CLIENT EXAMPLES
Trade Finance
BAMLHSBC
Identity management
Crédit Mutuel Arkéa
Food Safety
Low liquidity securities trading and settlement
JapaneseStock
Exchange
Settlements through virtual currency
MizuhoFinancial
Channel Financing
IBMGlobal
Financing
Contract Management
BTMU
FX Netting
CLS
Reward points management/IoT
CUP
6© 2016 International Business Machines Corporation IBM Blockchain
IBM Blockchain in Financial Services SectorPAYMENT NETTING (FX) LOW-LIQUIDITY SECURITY TRADING
Provide efficiency and resiliency
across global FX markets in a standardized
manner
Reduce trade settlement time by
automating the end-to-end multi-party interactions for low
liquidity trading
LOYALTY POINTS
Build a peer-to-peer reward point trading system
between banks, credit card users, gift shops, for
seamless exchange of loyalty reward points
CONTRACT MANAGEMENT
Accelerate theDesign, Management
and Execution of Contracts among
business partners on the Blockchain
7© 2016 International Business Machines Corporation IBM Blockchain
IBM Blockchain in International Trade and Supply-chainDOCUMENT WORKFLOWS
Manufacturers
Suppliers
Products
Track Others Track Back
Faulty Part
SUPPLY-CHAIN VISIBILITY
Automate current inefficient, manual and error-prone
workflows in documentary trade
finance
Provide single view for purchase order
life-cycle across the supply-chain as the truth
TRADE/SUPPLY-CHAIN FINANCE
Improve the efficiency of (our) commercial
financing business by sharing data in a
secure and transparent manner
SUPPLY-CHAIN PROVENANCE
Provide provenance across the supply-
chain cutting through complex distribution and
processing ecosystems
8© 2016 International Business Machines Corporation IBM Blockchain
IBM Blockchain in Healthcare
HEALTH DATA EXCHANGE CLINIICAL TRIALS CONSENT MGMT.
Data Exchange across Health eco-system based on
patient centric control and consent
Patient consent management, data
capture and exchange based on consent;
enable compliance & auditability
PHARMA SUPPLY-CHAIN PROVENANCE
Provide a complete end-
to-end audit trail in the pharma
supply chain by serialization
CLAIMS AND FRAUD MANAGEMENT
Full audit trail of electronic medical
records, pharmacy, claims data, etc.facilited by data
exchange (above)
9© 2016 International Business Machines Corporation IBM Blockchain
FINANCIAL SERVICES SECTOR
10© 2016 International Business Machines Corporation IBM Blockchain
Develop a payment netting service to provide efficiencies and resilience to the foreign exchange market
Global market limited by:• lack of standardized payment netting process for trades not
settled within the current CLS environment
• institutions intervening manually to complete the process
• inconsistent netting approaches, resulting in higher costs and increased intra-day liquidity demands.
CLS Group has partnered with IBM to release a payment netting service called CLS Netting. This will• be used for buy-side and sell-side institutions’ FX trades that are
settled outside the CLS settlement service.• have a Hyperledger based platform which delivers a
standardized suite of post-trade and risk mitigation services for the entire FX market.
“It (CLS Netting) is a significant step forward in
reducing risk and providing further efficiencies and resilience across the global FX market.”
David PuthCEO, CLS Group
11© 2016 International Business Machines Corporation IBM Blockchain
Securities settlement in low liquidity markets
Today’s process
Settlement Process with Blockchain
Reduce trade settlement time by automating the end-to-end multi-party interactions from trade execution to settlement on the blockchain for low liquidity trading
Benefits1. Reduced settlement time2. Reduced settlement risk3. Lower cost transactions
12© 2016 International Business Machines Corporation IBM Blockchain
Loyalty points network with China Union Pay
Bank A Bank B
Gift Shop A
Identity Service
Gift Shop B
• Banks invest about $4B in credit card points market in China
• Less than 50% points are redeemed
• Other rewards worth at $100B level
“At least Save $15M to build loyalty point exchange for banks by Blockchain Than Traditional Approach”
Unionpay Blockchain Leader, Mr. Yan. In the future , it can be for a larger Business Network: Airline, Super Market, Hotel, Car
Rental, Restaurant, etc
13© 2016 International Business Machines Corporation IBM Blockchain
Typical Use Case Loyalty Points Exchange
Bank B 12,000 + Bank C 9,000 = Bank A 20,000
Channels to exchange points
Cross Bank Exchange
Transfer within Banks
Channels to redeem (online + offline)
online shops
stores
Scan gift and generate QR TokenSmart POS
Check available points
Scan QR Token on phone to request transaction
Complete
14© 2016 International Business Machines Corporation IBM Blockchain
To examine the design, management and execution
of contracts among business partners using Blockchain technologies
15© 2016 International Business Machines Corporation IBM Blockchain
INTERNATIONAL TRADE
16© 2016 International Business Machines Corporation IBM Blockchain
Blockchain for Supply Chain VisibilityWhat?• Prove out the ability of Blockchain technology to address key
supply chain visibility pain points• Provide a single view and source of the truth regarding the
lifecycle of a Purchase OrderHow?• Shadow Ledger capturing Buyer, Supplier, and Carrier EDI data
to the Blockchain with a web-based User Interface providing enhanced visibility
Purchase order
Carrier load
tender Tender response
Advance Ship Notice Shipment
Status
Blockchain
Visibility Portal
Retail
Trucking CompanyManufacturer
Blockchain
17© 2016 International Business Machines Corporation IBM Blockchain
Blockchain Solution for IBM Global Financing (IGF)
What?Improve the efficiency of our commercial financing business by sharing data in a secure and transparent manner on Blockchain
How?• Blockchain enables Comprehensive View of key
operational data: Purchase Order > Transaction Approval > Shipments > Invoices > Remittances
Benefits• Fewer disputes & faster settlement• Reduction in dispute resolution time: 40+ days to under 10
days• Improved capital efficiency; freer flow of capital
orders
Partners Suppliers
products and services
IGF
IGF world-wide statistics4000+ Partners and
Suppliers
2.9M Invoices / year
$44B Financed / Year
$100M Capital tied up
any time!
25,000 Disputes /
year
$31K Avg. disputedinvoice value
44 days Avg. time to
resolve a dispute
Our Commercial Financing business provides working capital to IT suppliers, �distributors and partners through financing of inventory and accounts receivables
18© 2016 International Business Machines Corporation IBM Blockchain
Improved Documentary Trade FinanceAutomate current inefficient, manual and error-prone workflows in documentary trade finance (e.g., letters-of-credit) via smart contracts on the blockchain
Benefits1. Faster transactions with less complexity2. Improved transparency and visibility => fewer errors3. Lower cost of transactions
EXPORTER IMPORTER
Importer BankExporter Bank
RequestL/C
L/C : Letter of CreditCI : Commercial Invoice
Place Order
L/C
L/C CI
CI
CI
Distributed Shared Ledger
Exporter Bank Importer BankImporterExporter
19© 2016 International Business Machines Corporation IBM Blockchain
Traceability/Provenance in Food Supply ChainsBuild a transformative end-to-end food traceability system, that cuts
through the complex distribution and processing eco-system, to provide provenance of food items across the supply-chain (“farm to fork”).
Benefits1. Increased trust 2. Pinpoint source of compromised food, reducing the unnecessarily broad recall3. Improved co-ordination in food supply chain4. Handle changing regulations easily using smart contracts
Supplier
Distributor
Consumer
Product
QR Code
Product Information
supply chain
…
Auditor
20© 2016 International Business Machines Corporation IBM Blockchain
IBM Blockchain
IBM • Invented the industries first Blockchain for
regulated businesses• Created the first decentralized membership
service for permissioned-blockchains, making it possible to comply to regulations (like the European Union Data Protection Directive).
• Pioneered blockchain platform as a service on Bluemix (one click is all that needed to spark a blockchain network) and
• Set the gold standard in security with the industries first high security network.
21© 2016 International Business Machines Corporation IBM Blockchain
BACKUP
22© 2016 International Business Machines Corporation IBM Blockchain
REG-TECH
23© 2016 International Business Machines Corporation IBM Blockchain
Blockchain-Enabled Know Your Customer
Pain Point Solution Benefit
• Redundancy: Most large FIs use similar data and processes to verify the same clients
• Eliminate redundancy: Documentation needs to be verified only once before the approval information is shared
• Inefficiency: Manual and time consuming process to gather and verify documentary evidence
• Increase automation: Documents and approvals are digitized and can be verified without manual intervention
• Lack of specificity: Requirements for due-diligence are often fuzzy, creating uncertainty on compliance to avoid legal sanction
• Standardize process: Standardized, automated KYC processes sanctioned by regulators
Source: 2016 Know Your Customer (KYC) Independent Survey (Thomson Reuters)
Build a single but cross-business KYC platform providing employees with a consolidated view of all documentary evidences collected by any entity of Credit Mutuel Arkea Group, helping to reduce unnecessary duplication of information and requests.