It’s a wrap on SIBOS 2018 in Sydney, here are some of the key blockchain takeaways

Introduction

At this year’s SIBOS event in Sydney, Australia, blockhain was THE hot topic. Sibos is a global financial services conference and exhibition organized by SWIFT, the banking and finance industry secure financial messaging organization (SWIFT includes more than 11,000 members). This year’s SIBOS was attended by 7,000+ executives, decision makers, and thought leaders from the financial services industry sector.

The hottest blockchain topic was “trade finance,” an area that benefits greatly from blockchain immutable record functionality. Some of the most common concerns voiced at the conference were scalability, integration with traditional hardware (legacy systems), and overall interoperability between blockchain platforms — all crucial for speedy, effective and secure operations in trade finance.

For example, during a session hosted by SWIFT entitled “Currency Cloud, and Cloud Elements”, the discussion revolved around how blockchain standards can accelerate the adoption of API’s while ensuring that safety and interoperability are not sacrificed.

The ensuing discussion pointed out that the major concern in the financial services industry is a fear that financial institutions will develop solutions using homegrown APIs that will not interoperate with other solutions. The session pointed out that the way around this problem is through the use of standards and intercompany cooperation. And this conclusion supports the purpose of the conference – to drive standards for interoperability.

Accenture Shines: The Company’s New Blockchain Solutions

Accenture, with a slew of new product introductions and patents, showed attendees its major commitment to blockchain in the financial services industry. At the conference, Accenture launched two solutions that the company believes will be a “game-changers”: helping accelerate adoption of blockchain technology by improving the interoperability of blockchain platforms, which includes:

1) Asset Locking Mechanism in value transfer. At a high-level, assets are transferred from one DLT to another by “locking” the asset on the first chain and then creating a representation of the asset on the second DLT platform.

2) Double-Spend Prevention in “active state.” When building a blockchain integration solution, the solution must maintain as many blockchain-like guarantees as is possible. . Accenture’s new solutions can alleviate the interoperability issue helping to promote further blockchain adoption in the trade finance space.

How Do These Solutions Work?

Accenture’s “interoperability nodes,” allow platforms that have, extremely diverse standard, policies, and guidelines stay consistent and synchronized with one another by maintaining what is known as an “active state.” An active state allows two different systems, using different APIs, to communicate without giving up each system’s respective preexisting protocols. As an example, Accenture showed the industry’s  Hyperledger Fabric working with R3’s Corda, a different environment that has been very popular with trade finance banks that have adopted blockchain.

Global Trade Review (GTR) had the chance to discuss the new Accenture offerings in more detail with David Treat who leads Accenture’s blockchain division. Treat reported “We have conducted testing and are working with our first sets of clients now. We hope to be able to announce first implementations soon.”

Accenture’s two solutions have been developed and tested, and trials have shown successful interoperability between blockchain platforms. Accenture links four distributed ledger technology (DLT) platforms so they can communicate with one another in several different ways. Right now platforms Digital Asset, R3 Corda, Hyperledger Fabric, and Quorum can be linked. In the future Accenture plans to add different enterprise databases to the mix as well. According to an Accenture press release the company “has filed two patent applications for key elements of the underlying technology used in the integration technology solution, and expects to file additional patent applications in the near future.”

Other SIBOS blockchain buzz

Blockchain sessions were highly attended. According to Financial Review, during one of the sessions a group of roughly one hundred people were all huddled around a table to listen to representatives of Digital Asset and R3 Corda discuss the future of blockchain technology in the banking world.

Digital Asset, chief executive Blythe Mathers was invited to speak at an ASX (Australian Securities Exchange), breakfast briefing offsite to discuss future plans with Digital Asset and ASX. ASX, which had one of the most prominent booths in the main exhibition hall, provided briefings around how one of their internal systems, a settlement and clearing system will use Digital Asset’s technology and DAML, an enterprise smart contacting language in the future.

On Thursday, October 10th, there was a Digital Asset announcement made outside to conference as well. Deutsche Bundesbank and Deutsche Börse successfully completed performance testing of prototypes for securities settlement using blockchain technology. Using Hyperledger Fabric (version 1.0) and the Digital Asset Platform, the prototypes underwent demanding performance tests that showed they could handle realistic financial market infrastructure. According to Deutsche Bundesbank, the prototypes support security transaction settlement, payments, interest payments and repayments at the maturity of a bond. Berthold Kracke of the Deutsche Börse Group, explained that the testing proved that for their current infrastructure pertaining to applications in the field of settlement, blockchain was suitable. She explained, “thanks to the cooperation with Deutsche Bundesbank and the expertise of Digital Asset, we were able to tailor the product to the needs of the industry.”

Also at SIBOS, R3’s Corda announced last week it would be linking with Samsung’s Nexledger blockchain. In Rotterdam, Netherlands, Europe’s largest port, supply chain logistics processing is crucial. The solution, which will begin a testing pilot early next year, looks to streamline logistics processing.

Finally, Accenture announced a supply chain partnership with Thailand’s Siam Commercial Bank focusing on a blockchain supply chain tool. Named Procure-to-Pay or B2P, it leverages R3’s Corda technology at its roots, the release explains.

Summary Observations

When discussing blockchain the difference between this year’s SIBOS conference and last year’s conference is that there was less hype. This year, the conference moved into a more protypical phase, with more and better-tested, or already available, solutions.

Announcements by Accenture, and the four platforms (Digital Asset, R3 Corda, Hyperledger Fabric, Quorum) showed that leading vendors are now stepping-in to help create standards for interoperability. They are proving that blockchain can work across various application environments and across different platform types. In an industry where standards for interoperability amongst blockchains are still being articulated, these four companies have taken it upon themselves to help create interoperable blockchain environments.

At this year’s conference, Accenture was a shining star. The company showed a willingness to tackle blockchain interoperability issues; the company showed that it is investing heavily in blockchain architecture (even pulling new patents); and the company is showing that it is willing to partner to help its banking clients address their concerns regarding scalability, integration with traditional hardware (legacy systems), and overall interoperability between blockchain platforms

At next year’s conference, expect more progress to be made in blockchain standardization. But, consider this, at this year’s conference significant progress was demonstrated. SWIFT, Accenture, and others are starting to make strong progress strengthening blockchain as the new replacement for “traditional” transaction processing.

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