Blockchain technology has become the technology solution of “trust” and a key driver for digital transformation. But before businesses can develop a blockchain adoption strategy for their organisation, it’s important to understand what makes this shared digital ledger so unique, how it can be used outside of crypto use cases to support specific business needs and the capabilities it can offer to some of the fastest-growing sectors in the industry.
Increasing Efficiency by Cutting Out the Middle Man
Disruption is all about increasing efficiency by cutting out the middle man and directly connecting two individual people or companies who want to do business. Blockchain was originally developed to support cryptocurrency, which removes banks from the middle of a transfer of funds between two parties. Today, blockchain is eliminating a third party in an astounding assortment of industries by establishing an unprecedented level of trust.
Greater Trust Means Greater Efficiency
Imagine what the business world would be like if everyone completely trusted everyone else to deliver exactly what they said they would. There would be no need for cumbersome validation processes. With blockchain, there is no chance of human error or false identity. When a bank, a manufacturer or a supplier knows that they can absolutely trust the identity of the person they are transferring funds to, the data they are getting from a sensor is valid or the amount of electricity a consumer is using and being charged for is correct, it eliminates a giant, unwieldy, human-led part of the transaction process and allows everyone to get business done faster and more efficiently.
With blockchain, all participants in the ecosystem are vetted. The blockchain ledger cannot be changed, except by consensus, and it is immune to tampering. For example, if two parties agree upon a smart contract to ship 100 items, blockchain technology ensures that 100 items are shipped, there is automatic confirmation that 100 items are received and payment to both the vendor and the shipper is transferred instantly. Processes that could take days or weeks to reconcile, involving a large number of human participants, are resolved in moments.
Blockchain as a Stepping Stone for Digital Transformation
Because all participants are vetted and their identity is confirmed, blockchain is ideal for high-security environments like banks. One government bank in Europe wanted to implement blockchain as part of their digital transformation, so Lenovo has been working with the government to establish a digital identification system that will be used by governmental agencies and commercial banks throughout the country and has already implemented the architecture of a new blockchain platform.
Advancing the IoT Revolution
Blockchain has ramifications for other aspects of business, especially when incorporating the Internet of Things (IoT). One of the issues with IoT is the increasing security risk of the billions of devices that will inevitably be deployed and operational within the next year. It is much harder to secure devices on the edge, especially with so many of them. A decentralised security system like blockchain is what is needed to make sure those devices aren’t hacked. With blockchain, the IoT revolution can continue, safely.
At Lenovo, we are working with a drone company that is combining a blockchain solution with artificial intelligence (AI) in an IoT context. The drones scan sensors on things like wind turbines and transmit that data back to a central office to be analysed. Blockchain technology guarantees that data is accurate, time-stamped and secure. The end user’s insurance company no longer needs to insert itself into the process to validate the data, and a human doesn’t have to go near dangerous equipment such as wind turbines to inspect it.
Business Transparency Enhances Consumer Trust
While blockchain uses trust to enhance security and safety, some companies also see a business opportunity to create a better customer experience. Providing transparency into business processes makes customers feel like they can trust that business, especially when combined with giving the customer more control. Blockchain makes both of these things possible. For instance, a company in Germany is developing blockchain-powered refrigerators that will allow consumers to not only monitor their refrigerator’s electricity usage, but also choose where that electricity comes from (wind farms, solar, etc.).
Transforming the Supply Chain
The supply chain is yet another area where blockchain is cutting out middle men, speeding up the process and giving more control to the consumer. A company in Seattle, Washington is using smart contracts to let consumers track their coffee from the bean in the field to their cup. This not only ensures that consumers are getting what they paid for, it even allows them to choose which farmers to buy from. Coffee bean farmers will be able to watch the same process, seeing where and for what price their coffee is actually being traded, eliminating fraud and confusion. At Lenovo, we’re using blockchain to transform our enormously complex supply chain and make it more efficient.
We’ve only just scratched the surface of blockchain’s potential for business. The key to transformation is knowledge of how this technology works and is evolving. As customers consider embarking on a blockchain journey or adopting new solutions to bolster existing capabilities, they should always be thinking about how solutions can be customised to fit the future needs of their business for an ever-increasing competitive edge.
Reserve Bank calls for fintech entries to Hackcelerator
The South African Reserve Bank (SARB) is calling on fintech firms to submit innovative and sustainable solutions to challenges identified within the financial services industry, for the 2019 Global Fintech Hackcelerator @ Southern Africa.
The Hackcelerator, backed by KPMG Matchi, is a fintech acceleration programme that creates a platform for solutions to complex financial challenges in the Southern African region. Fintech firms from anywhere in the world can apply to participate in the programme, to address problem statements constructed by the SARB.
The SARB views such global fintech acceleration programmes as enabling processes to embrace fintech, while affording the opportunity for regulators to appraise benefits and risks in a balanced manner.
Shortlisted respondents will be invited to showcase their solutions at the Southern African Demo Day on 29 October 2019 in Johannesburg. On the Demo Day, a panel of judges from the SARB and the Financial Sector Conduct Authority, as well as local industry experts, will select and announce two winning solutions.
Each Global Fintech Hackcelerator @ Southern Africa 2019 winner will:
- Receive a stipend towards travel expenses to attend the 2019 Singapore Fintech Festival
- Get an opportunity to pitch their solution live during the Hackcelerator Demo Day at the 2019 Singapore Fintech Festival and engage with industry experts;
- Receive funding to develop a contextualised proof of concept, to be deployed within a year from the Demo Day; and
- Work with high-value corporates to contextualise a solution to their needs, while obtaining market entry into the Singapore and Asia-Pacific region.
The top three winners at the Singapore Fintech Festival will also receive a cash prize.
Applications for the Global Fintech Hackcelerator @ Southern Africa close at midnight on 8 September 2019. View the problem statements and complete an application form at https://matchi.biz/hackceleratorSA.
Cybersecurity needs fresh eyes
By IAN JANSEN VAN RENSBURG, lead technologist at VMware
From digital transformation through to the arrival of the Fourth Industrial Revolution (4IR), decision-makers are changing their views on how technology can benefit the organisation. But while much attention is placed on things like data analysis, the cloud, and automation, cybersecurity has fallen by the wayside.
Given the greater connectedness between businesses, their customers, and partners, it is easy to understand how the focus has shifted to finding better ways of nurturing relationships for a common good. This has resulted in finding more innovative ways of extracting meaningful insights from the data at their disposal giving way to artificial intelligence and machine learning complementing human intelligence. But when it comes to safeguarding that data, many are still reliant on using anti-virus and firewall solutions.
Changing threat landscape
It seems counterintuitive and yet businesses continue to combat sophisticated security threats in the digital age with traditional tools. If other digital solutions have evolved and been embraced, why the hesitance to adopting the same approach around cybersecurity?
According to a recent survey, only a quarter of business leaders across the Europe, Middle East, and Africa are confident in their current cybersecurity solutions. And despite three quarters of business leaders believing their security solutions are outdated, only 42% admitted to acquiring new tools over the past year.
Furthermore, 35% of South African IT decision-makers are expecting some form of attack to occur not within years or months, but days. Given this context, it has become paramount that not only must investments in new security products increase, but mindsets also must change if companies are to keep their data safe from compromise.
Not about money
It seems that spending patterns have already started to change. Worldwide spending on cybersecurity topped more than $114 billion last year with the market expect to grow to $124 billion at the end of this year. Changing security risks, business needs, and industry changes are the main reasons driving this. Of course, it is one thing to implement new solutions and something else entirely to foster a cultural change inside the business.
Sadly, nearly a third of IT security respondents say that it takes up to a week to address a cybersecurity issue. In today’s real-time environment, this is not good enough. Recently, the City Power in Johannesburg was hit by a ransomware attack that not only compromised its databases but left many clients unable to buy prepaid electricity. Imagine the reputational (and financial) damage of taking a week to resolve this.
Clearly, existing cybersecurity policies are not adequate. The biggest shortcoming in the rush to become cyber vigilant is outdated software. Organisations must therefore move beyond their traditional way of managing cybersecurity. Just like they have embracing other innovations for the digital age, so too must they closely examine how their existing IT security systems need to be overhauled.
Slow and inefficient practices are resulting in businesses losing their confidence in their ability to combat the latest cyber threats. Throwing money at the problem will not make it go away. A fundamental change to how cybersecurity is managed in the organisational structure is necessary if the business is to be protected against more sophisticated digital threats.