IBM Joins Blockchain Push
The launch earlier this year of an open transaction initiative designed to develop industry standards for blockchain technology generated much interest and buzz. For example, the financial and technology sectors are flocking to the Linux Foundation effort called the Hyperledger Project aimed at scaling blockchain technology via open standards for distributed ledgers. Proponents argue the effort could transform global business transactions.
Meanwhile, other industry initiatives are emerging to promote blockchain technology used to record and verify transactions. The Washington-based Chamber of Digital Commerce formed a Blockchain Alliance in 2014 that includes startups and software developers focused on security standards and curbing criminal activity on a future blockchain infrastructure.
Among the group's new members is IBM (NYSE: IBM), which this week announced along with a French banking partner completion of a blockchain project aimed at validating customer identities. The pilot project is described as an "operational permissioned blockchain network" for viewing customer identities. It also enables compliance with so-called "know your customer" (KYC) requirements, the companies noted.
IBM's partner, Crédit Mutuel Arkéa, said Thursday (June 30) the pilot project provided a view of customers' documents across a distributed network. The financial services firm said it plans to incorporate blockchain technology into its business operations that serve 3.6 million customers.
The partners also said they will next work to federate "silos" of customer data to create a single KYC platform to support most of the bank's business processes while reducing duplication of information and requests. The result would be a "permissioned" blockchain network where only members of the digital network with the appropriate permissions would have network access.
They added that the pilot project was based on the open-source Hyperledger Project fabric that, they noted, reinforced information privacy in a "highly regulated environment." A working KYC platform could for example help customers verify their identity to third parties such as retailers and utilities.
The partners also leveraged IBM's Bluemix cloud platform for project development, including DevOps and a "blockchain-as-a-service tools.
Besides financial services, IBM said it is working with other clients on other blockchain technology projects related to supply chain, risk and digital rights management along with the Internet of Things. Earlier this week, it announced the opening of a Bluemix "garage" in New York City to help fintech developers working on cloud-based blockchain projects.
That along with the French pilot project and a blockchain report released this week by IBM underscore how the drive for an open digital transaction framework is gaining traction among large enterprise cloud and IT vendors. IBM makes the case in its report that blockchain technology promises to eliminate business "frictions" ranging from inefficiency to cyber crime.
"A distributed ledger for business networks based on blockchain technology has the potential to eliminate these frictions," the IBM report asserts. Moreover, distributed ledgers based on blockchain technology are seen as shifting the focus from information controlled by an individual to the entire history of a transaction or asset.