Banking on Future Technology
The Bank of China (BOC), one of the largest state-owned commercial banks in China, is in the process of significantly modernizing their operations. The bank certainly has the funds to do so, with an operating income of $70.9 billion US in 2017 and an extensive network of financial services that serve China and other countries overseas. Bolstering its already ferocious technological infrastructure, the BOC is innovating in the direction of real time analytics, big data, and artificial intelligence. The plan is to leverage these for the purpose of comprehensive customer data analysis, credit risk evaluation, and more.
The BOC is also looking to bulk up its comprehensive risk control system, which is no slouch even in its current state, having monitored millions of transactions to prevent money laundering and other fraudulent transactions.
The BOC newest innovation strategy is a major initiative in the fields of cloud computing, big data, AI, and yes, blockchain. The objective is to engineer a qualitative digital transformation of their business along with an upscaling of financial technology (FinTech) services. Liu Quiwan, Chief Information officer (CIO) at the Bank of China, recently stated that the organization intends to invest 1 percent of its annual operating income in these areas.
Next Stop Blockchain
The BOC’s blockchain investment strategy harmonizes with their fintech ambitions. The bank already uses blockchain in as many as 12 projects, including cross-border payment, digital currencies, data sharing, and others. When it comes to patenting blockchain technology solutions, the BOC is very active. They’ve already filed 11 such patents, putting them squarely in the number 1 position for blockchain innovators in the Chinese banking sector. One patent in particular focuses on achieving blockchain scalability through compressing the data in the blocks.
Overall, the BOC’s focus on blockchain is part of its broader plans to digitally upgrade its operations. Its goal, like many major financial institutions, is to transfer all transactions to a secure digital platform, obviating the use for hard currency.
While the Chinese government has shown a tough stance toward cryptocurrencies in the past,although they have recently released a ranking of top coins. Standing in stark contrast to their mixed messages on cryptocurrency is their enthusiasm toward blockchain, which includes a plan to launch a nation-wide blockchain standard before the end of 2019. Other explorations of the technology’s power include a regional government choosing the Ethereum platform for their high-visibility Dream City project.
Blockchain also fits in well with broader fintech initiatives in China, such as a completed trial of a blockchain-fueled money remittance service, and in the west, like the blockchain based app store operated by Citigroup, Barclays, and tech giant IBM.
The BOC may have the lead in blockchain innovation in the Chinese financial system, but many others are doing their best to catch up.