The Industrial and Commercial Bank of China (ICBC) has shifted its focus to blockchain to help augment its financial services. According to a press release, ICBC is investigating blockchain technology for different applications, including the creation of an electronic platform dubbed ‘e-ICBC3.0’, blockchain integration for enhancing their information ecosystem, and the “construction of smart banking application scenarios.” The success of these experiments will go a long way in helping the company revamp its financial service offerings.
ICBC Chairman Yi Huiman corroborated the report in an article published by Chinese news outlet – Bia News. Aside from using blockchain technology to improve financial services, Huiman also implied that their research team is “grasping the application scenarios” and now have better ideas with regards to business applications that will benefit significantly from distributed ledger technology integration.
Blockchain in the Finance Sector
As technology continues to change the world and reform the financial industry, many companies in this area have been compelled to revisit their business models and processes in order to keep up with the rapidly changing times. Emerging technologies like blockchain and artificial intelligence have hit the finance sector like a wave, prompting banks to start investigating how they can integrate it into their overall systems. Traditionally, banks utilize centralized architecture in their operations; and consequently, offer centralized services to customers. The danger of this approach is that it creates a single point of failure whereby financial services may suffer if the central structure/server is compromised.
Blockchain presents a different and more efficient approach to traditional banking. With blockchain integrated financial applications, banks can now offer customers high-performance services that are more efficient, secure, and scalable. Blockchain eliminates the problem of centralization and single point of failure since it operates in a decentralized manner. ICBC is looking to capitalize on these merits to create innovative services for its nearly 2.6 million corporate customers and 150 million individual customers.
Why is ICBC Blockchain Exploration Important?
ICBC blockchain explorations are significant because of the bank’s position in the global finance market. With an aggregate of about 4 trillion dollars in total assets, the Industrial and Commercial Bank of China is not only China’s wealthiest bank, but it is also the largest bank in the world. This finance giant also holds the record for the highest number of financial transactions and international operations carried out by a bank. Therefore, every decision the company makes is definitely bound to have far-reaching global consequences. There is a clear momentum in the adoption of the blockchain technology in the global banking sector and a recent report estimated that banks could save up to $20 billion by 2030 with the adoption of this technology.
Other Blockchain Developments
When it comes to blockchain and other innovative technologies, ICBC has been quite busy. In July, it was reported that the corporation was seeking a patent for a blockchain system to aid the exchange of financial assets. The patent describes a platform that utilizes nodes and smart contracts for transaction validation in a distributed network.
According to the patent document:
“The traditional transaction chain that is built around a centralized credibility system incurs problems like the high cost, low efficiency, low stability, as well as inflexibility. This impedes the bank’s launch-to-market process to meet the rapidly growing demand for innovative financial products.”
ICBC has also seen advancement in other areas in recent times. The bank has been able to improve its Internet financial development strategy by upgrading its integrated architecture of Internet-based finance, with a focus on open online banking platform ICBC Mobile, the e-commerce platform ICBC Mall, the instant messaging platform ICBC Link. These developments cover a range of offerings including financial services, e-commerce and information services.