The bank that lost its chief financial officer to a Cayman blockchain organisation on Monday has revealed its intention to commercialise its South African distributed ledger solution in Australia.
The Commonwealth Bank of Australia (CBA), through its South African business TymeDigital, has been working on a blockchain solution that is "actually going into market".
According to the bank's executive manager of emerging technology Chris Connor, the solution is something that can "definitely scale".
"I think the vision we have for that is the first stage is that you can upload documents and share those documents, and then across organisational boundaries, having them validated by third parties and then being able to share those," Connor told the CeBIT Australia conference in Sydney on Tuesday.
"Any financial interaction, whether it's travel or an international money transfer or electricity, there's often supporting documentation for that, so if you think about getting a job or swapping money or swapping title of a property -- so with this solution that we've developed, we will be able to share, create, and validate documents across organisational boundaries."
Connor said that ultimately, this will allow for it to happen at a cross-country level, too.
"We definitely see an opportunity to do that in South Africa, and there's no reason why we can't do it in Indonesia, and also in Australia," he continued.
"I think it's interesting now we're starting to think about how can we do blockchain at an enterprise level? We started with international money transfer with our work with Ripple; we did the Wells Fargo experiment, which was the trade experiment; I think the constraint -- the technology can do it -- now it's the commercial model, now it's the regulatory model, across jurisdictions.
"Also, the thing that's fascinating from my point of view, is that it gives you an opportunity to think about a particular use case and actually reimagine how the business works in that space."
TymeDigital by Commonwealth Bank SA received its banking licence in September last year.
It was established under the stewardship of Rowan Munchenberg, who is now the managing director of CBA subsidiary Bankwest.
"This is a key milestone in our plans to launch a full service digital bank and disrupt banking in South Africa," TymeDigital CEO Sandile Shabalala said at the time. "We will offer South Africans the ability to open accounts and transact securely, within minutes. Through our innovative technology and financial education we aim to get more people using banking services to enhance their lives and increase economic participation."
Connor discussed the progression blockchain has made over the past few years, saying the dialogue has shifted from one focused solely on bitcoin.
"Business is starting to understand the technology now, we're not talking about consensus and here's blockchain, bitcoin, and all that -- we're past that now and we're thinking about how can we use this technology in a commercial setting," he explained.
"So all the discussions within the bank now are really around what's the business case, how can we actually apply this in a commercial setting. Because blockchain is a collaborative tool, we're finding more and more we're working outside of our organisation, we've actually got an initiative going with Data61 where we're doing a research piece of work at the moment on investigating the implementations of blockchain at a national stage ... the highlight for me is the transition from the theoretical to the practical and the commercial."
However, he did say it's important to step outside the hype and make sure that the cost of change and transitioning is going to justify the business benefit of heading down a blockchain-based path.
"In fact, one thing that we're finding now is that while the technology can do the thing -- whatever the use case might be -- there's all the other elements, the regulatory environment, the commercial model, the customer experience, and why would you even change over to blockchain," Connor said.
"I think a lot of the time you look under the covers of the use case and a centralised database can do the job -- so we're really at that point now where we're starting to dig into the detail and we're not wowed by experiments anymore, we're saying how do we make this thing for real, how can we offer a robust solution and meet all of our obligations."
According to Connor, at a local level at least, there has been a "deep desire" for the regulators in Australia to work with CBA on discovering new ways of providing banking-related services, such as through blockchain.
"I'm inspired actually," Connor said. "The interaction that we have with our regulators -- we deal with a lot of regulators -- there's a real deep desire to actually work with us to discover and to figure out new problems, figure out new ways of doing things, and there's been a lot of interaction and it's been very productive."
He said his bank is "very supportive" of the role regulators have where emerging technology is involved.
"At the same time, there seems to be a sophistication thankfully on both sides of the equation to not only meet our obligations today, but also to reimagine the future, and then to work out the detail between here and there and we've done that in so many different ways and I'm very encouraged by the level of sophistication of the interaction," he added.
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