Potential uses of distributed ledger technology (DLT)
Together with its partners in Italy, GFT is helping set up a secure, interoperable and cross-platform blockchain DLT network across Europe. There are three main application areas: reducing the risk of fraud in billing (finance industry), certifying products and classifying quality (pharmaceutical industry), and real-time reimbursements (transport industry). For the invoice settlement scenario, GFT has produced a proof-of-concept for advanced invoicing which simulates the traditional invoicing process using a blockchain DLT network, based on the R3’s Corda technology. The pilot will go into production in a few weeks’ time. Currently, if a company asks a bank for a loan equal to the value of an invoice they are expecting to have paid, it involves several risks and exposes the bank to fraud. For example, the same invoice could be presented to several banks as collateral. DLT helps mitigate this risk by integrating all invoices into a single, secure ledger which all banks can access and query at any time. In the new scenario, depending on the DLT response, the bank can decide to grant the loan or not. “This drastically reduces the underlying credit risks,” states Lulay.
There are numerous processes involved in international money transfers, trade transactions, securities trading and trade finance activities which are all still handled manually, which is both time-consuming and costly. “Blockchain enables us to automate and simplify these processes, thus making them more efficient,” says Lulay. By using smart contracts, for example, banks could optimise the current manual processes for the settlement of securities transactions, such as equities and bonds.
Richard Miller, Strategy Head – Disruptive Technology, GFT said “We are seeing tremendous interest from clients wishing to examine how distributed ledger technology can add value to their business. Clients are recognising that now is the time to utilise DLT and blockchain for non-mission-critical use cases that have the potential to be truly transformative.”
GFT Coin promotes employee recognition within GFT
In order to promote DLT, blockchain and cryptocurrencies amongst GFT’s own workforce, a GFT cryptocurrency named ‘GFT Coin’ was created as a pilot project in the UK in early 2018. The initiative is currently being rolled out across the GFT Group. Employees receive a number of coins every month and can ‘reward’ their colleagues with a GFT Coin as they see fit. For example, colleagues reward each other for giving a helping hand, writing a new external blog, or taking on additional tasks outside of their main area of work. The reason for the reward is specified in the transaction. Although the coins have no value (as yet), they are an ideal way to promote team spirit and foster a culture of healthy feedback within the company.
“We’ve been experimenting with various application ideas since the early days of working with blockchain. It is great to now see how this early commitment to the technology is bearing fruit. Our mission is always to radically rethink existing processes in the financial services industry and firmly establish GFT as the leading systems integrator for applications based on blockchain and distributed ledger technologies,” concludes Lulay.
*Further information on the R3 network and Corda technology
As a partner of the R3 consortium, GFT is involved in the ongoing development of Corda technology, which is specially tailored to the needs of the financial services sector. The blockchain-based open source platform for distributed ledger technology offers a high degree of data protection and interoperability.
*Definition of distributed ledger technology (DLT)
DLT is a special form of electronic data processing and storage. A distributed ledger is a decentralised database that allows users of a network to share read and write permissions. Unlike a centrally managed database, such a network does not require a central authority to make new entries in the database. The participants themselves can enter new data at any time. The subsequent updating process ensures all participants have the latest version of the database. One form of distributed ledger design is the blockchain system.