“Don’t be on the sidelines,” speakers say of blockchain

Blockchain, the technology behind Bitcoin, does not have a foothold in insurance yet, but it will no doubt disrupt some industries, speakers said last week at a financial industry conference.

Blockchain promises “massively new business models,” Andrew Maxwell, director of the Bergeron Entrepreneurs in Science and Technology program at York University, said May 10 at the Payments Canada Summit in Toronto. “It is one of the most disruptive investments that’s out there. We are not sure who it’s going to disrupt, or where it’s going to disrupt, but it is going to disrupt a lot of things over the next five to 10 years.”

Insurers exploring the capabilities of blockchain include Swiss Re, one of the carriers that founded the Blockchain Insurance Industry Initiative (B3i) in 2016. Blockchain could potentially “streamline paper work and reconciliations for reinsurance and insurance contracts,” the global reinsurer says.

Blockchain uses “distributed ledger” technology and is “nothing but a distributed database,” Kanchan Kumar, co-founder and CEO of Toronto-based wire transfer provider Remitware Payments, said May 10 at the Payments Canada Summit. Maxwell and Kumar were among the panelists at a Payments Canada Summit session called Blockchain: Is it Real?

One way universities can use blockchain is to grant degrees to students who took different courses at different universities. At the moment the barrier to doing this is “90% administrative” and “10% an issue of academic integrity,” Maxwell noted. “The minute you can give credits for doing individual courses at your university, rather than the whole degree, you have fundamentally changed the boundaries of organizations because you could do a degree by combining courses from 50 universities.”

One of the best-known applications of blockchain is Bitcoin, which uses a distributed ledger to record transactions.

“Aside from cryptocurrencies, there is no killer app yet for blockchain,” Elena Litani, senior manager of blockchain technology innovation for Toronto Dominion Bank, said at the Payments Canada Summit. She alluded to the fact that researchers were using the Internet for more than 20 years before the World Wide Web went public in the early 1990s.

TD Bank is looking at how financial services firms could use Blockchain “to either make existing processes more efficient or offer something new to the customers,” suggested Litani.

Executives in financial services tend to have a “conservative mindset,” said Sridhar Narayanan, executive architect of IBM’s financial services sector. “Don’t be on the sidelines.”