IMI-Hande Fintech Salon (No. 8): Block Chain Changes Banking Industry
2017-03-15 IMI
Mr. Liu started with introducing the current situation of block chain, which is used in the financial sector, especially the banking industry. He pointed out that the core of the block chain is distributed database, trusted machines and world computers. Then he dispelled the 3 rumors of block chain from three aspects: disruptive, decentralized and delay. He thought that it would be better to "change" than to "subvert" the banking industry. The core of the block chain is "distributed" rather than "decentralized ". In the liquidation process, the block chain payment is relatively slower than the internet payment. Besides, the block chain can be used in "liquidation" but not in "settlement" processes which are led by the central bank. Mr. Liu said that, although the public chain is more mature, it is hard to be accepted by the mainstream financial institutions as a solution. Currently, the private chain and the alliance chain are immature and are very different from the public chain in terms of technical structure. The bottom block chain is transitioning from the "Spring and Autumn Ages" into the "Warring States Period”. The industry hegemony has not appeared yet.
Subsequently, Mr. Liu explained in detail the impact of the block chain on the banking industry. He pointed out that, financial history is a history of science and technology. Although the bank's services and service methods are continuously improving, the bottom technology is still the old double-entry bookkeeping. Meanwhile, the block chain can provide us with a new key bottom technology - public books. He thought, as the technology develops, banks will tend to be invisible. Block chain technology can reduce the bank’s costs in aspects like human labor, hardware and intermediary services. Besides, it can also help to reduce the risks, enabling the bank to understand customers better and promote information sharing. The block chain can also change the banking industry in aspects like the central bank's digital currency, payment and clearing, supervision and compliance, KYC and credit, etc.
