A Digital Future With Blockchain
Blockchain technology is being adopted across the world by financial services companies, including LuLu Financial Group. Managing Director, Adeeb Ahamed, is leading the transformation.
There has been an evident uproar over social media behemoth Facebook’s recently unveiled plans for a new cryptocurrency called Libra. In mid-July, Facebook officials met in front of a U.S. congressional committee to discuss the new development, while Switzerland’s privacy watchdog had sought details about the Swiss-based cryptocurrency project. The takeaways from the hearing pointed towards the risk affiliated to the global financial system on introduction of such a system.
While specialists have long voiced concerns regarding the risks of digital currency, the social media giant is hoping the new advancement will give a new lease to its future. Facebook hopes that Libra, notwithstanding the current scrutiny, will be supported by established government-backed currencies and be accepted as a form of payment, when it is launched in 2020 or later. Facebook also plans to launch Calibra, a subsidiary that will develop products and services based around Libra.
Meanwhile, the underlying technology of it all— blockchain—has been gaining traction across sectors, as was evident from its center stage discussions at global events. Blockchain technology is being adapted for everything from data collection to healthcare and even governance.
Adeeb Ahamed, MD, LuLu Financial Group, agrees that blockchain will have a bigger role in the future, “Speaking to tech disruptors and financial heads at the World Economic Forum earlier this year in Davos, I firmly believe that blockchain will be the future in terms of how we do transactions. Some of the most important benefits of blockchain would be improving security of the data, reducing costs and accelerating integration. The information in a block cannot be altered, as each block contains a timestamp and a link to a previous block. This highly improves security while denying duplication.”
The global blockchain technology market is anticipated to reach $16.82 billion by 2026. With transactions being conducted over a network, it is difficult to tamper with a blockchain transfer. Blockchain also eliminates the need of third-party verifications since the ledgers are shared by all the parties over the distributed network.
Blockchain technology is currently being adopted by financial institutions due to benefits such as reduced infrastructural costs for reconciling statements, data management settlements, etc.
LuLu Financial Group, one of the leading global financial services company, had earlier this year gone live with an upgraded blockchain cross border remittance platform in association with the Federal Bank, a leading Indian bank for remittances to India. The initial blockchain platform for remittances was upgraded with sophisticated technology that uses the R3 Cords blockchain platform developed in partnership with an Indian fintech company. The platform offers a high level of security due to the distributed architecture and use of advanced cryptographic algorithms.
“At LuLu Exchange, we have always embraced innovative technology that gives rise to new products and services that enhances customer experience. We are sure these new integrations will ease process and bring further operational efficiency. Cost reduction is an integral part of the blockchain movement as it goes completely digital, which also in turns speeds up the process. The real time availability of data to all stakeholders also makes this a transparent system as well,” added Ahamed.
The future will see ambitious disruption in financial services, driven by continuous technological innovation. This innovation will drive valuable customer insights enabling the development of new products and services. The transformation of systems and process will enable organizations to respond to competitive threats. Markets and consumers will greatly benefit from the dynamic financial environment.