Blockchain technology is gaining ground in Africa as well, as six African banking institutions are reassuring that financial tech does not disrupt their businesses if they work together to connect their systems with distributed ledgers.
Absa, one of the top banks, is promoting blockchain technology and has also joined up with the R3 CEV consortium. Absa and the other banks collaborating in the South African region are trying to develop a blockchain-based banking solution to create a more efficient and less costly financial system.
Andrew Baker, CIO for Corporate and Investment Banking at Barclays Africa, stated:
“We see huge potential for financial institutions in Africa to embrace disruptive technologies like blockchain, and use them to empower individuals and improve the lives of their customers. However, its true value will only be realized if we work together to co-develop and share solutions to common problems,”
Absa also called for a private version of the Ethereum blockchain, while it is already experimenting with smart contract technology. Working groups of these banks are addressing financial services, intellectual property, and platforms that empower banking customers. Baker added that Barclays Africa has been experimenting with distributed ledger technology for a while now and has launched its Rise open innovation platform with its R&D experimentation.
Between testing a private Ethereum blockchain network and joining R3 CEV, the working group expects the banks to benefit from systems relying on distributed ledgers as opposed to traditional databases used today. Baker adds, “R3 has made significant breakthroughs to test how blockchain can be adopted by financial institutions.” With all the R&D going into these platforms Baker knows the industry is still quite young, and it will take time for these projects to take hold in the financial sector.
The Barclays CIO explains:
“Blockchain is still maturing and has yet to gain the trust of financial institutions and consumers alike. But if and when it happens, widespread adoption will happen quickly. Change is currently focused on disruptive innovation but will become more mainstream as industry alliances such as R3 and regulatory acceptance grows.”
Vinny Lingham, a South African serial entrepreneur and founder of blockchain startup, Civic, believes Africa will be disrupted faster than any continent on the planet.
Lingham explains:
“I think the banking sector in Africa is going to be disrupted faster than anywhere else in the world. What you have with bitcoin and blockchain is a trustless method of operating. You don’t need third parties like banks operating as trust brokers anymore. It’s all built into the code. The way mobile leapfrogged fixed lines communications in Africa, blockchain will leapfrog a lot of the financial infrastructure that exists today.”
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