In
this article, IBM is beginning to develop technology in online banking based
off of the methods that Bitcoin, the online “money” corporation, uses for its
online system. This system is called blockchain and is essentially works as Bitcoin’s
online ledger of every purchase/transaction ever made using their technology.[1]
IBM plans to use this same kind of technology
to create an open-source banking system that will be recorded and shared
publicly as well as safely. The main use of this technology would be for online
contracts between businesses and let them share information on one network. Another
goal of this technology, which IBM is working on, is to decrease fraud and spam
in bank transactions. The hope is that this will connect international business
and banks seamlessly and create a network of private contracts and
transactions.
In international business, the main
concern between companies is if their laws and protections of contracts are
similar. No company would want to work with a company residing in a different
country where contract law is different. Also, it would be easier for these
international countries to speak about these contracts if they could look at
the same page, on the same site. With IBM creating this type of technology and
banking/contract system would be crucial in helping these interconnected
companies. They would be able to create online, digital contracts that would be
easy to view and outline. This technology would help business-to-business
transactions improve because of the ease of use.
In the supply chain management, this
would create an easy flow from suppliers to companies. In the article they use
the example that a Chinese supplier could have a contract that once a product
reached the US company, the company would pay the supplier.1 This could all be done on the Internet,
which would cut costs and avoid supplier/company miscommunication.
Also, big name banks, such as
Goldman Sachs and Barclays, are thinking about using this technology as well,
sharing that it would be “making fraud more difficult.”[2]
A use for this would be to record the stocks and shares that pass through each
bank and log them into a ledger with easy access. This would “cut the cost of
reporting transactions and working out who bought what and when,”2
As for use in the regular world and
for average consumers, IBM vice president of research said, “I want to extend
banking to the 3.2 billion people who are going to come into the middle class
over the next 15 years,’ he said. ‘So I need a much lower cost of keeping a
ledger. Blockchain offers some intriguing possibilities there.”1
This technology could not only effect business-to-business transactions but
also regular banking that average citizens could use in the future.
After reading this post, I am intrigued by the many uses this IBM seems to provide businesses. Connecting banks to businesses would provide businesses with the opportunity to streamline their processes and run more efficiently; however, I am curious as to how they will do this safely, since all networks have the ability to be hacked. The ability to connect two international companies through this new technology; however, this high-tech system may not be available in many countries that are just starting to establish trade relations over the internet. Not all countries have the constant access to the internet like we do here, limiting their ability to utilize this technology. Not having the ability to use it could make companies in that nation less competitive than those in more developed nations. The idea of implementing this system into normal consumer banking does seem like a good idea to me. Banking can become tedious for the average middle class person, so anything that could smooth out the process would be beneficial. Before extending the service to consumers, the service should be tested more in order to prove its security.
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