Blockchain can transform the Caribbean’s financial services, says PwC

Bridgetown, Barbados, 28 September 2017 – According to PwC, blockchain could offer alternative channels for banks and governments to address derisking concerns for the Caribbean. 

Kris Kersey, Blockchain Director Lead, PwC, Advisory Services, Emerging Technologies and New Services, who was one of the invited guest speakers at Bitt Fintech Forum: Central Bank Meets Blockchain, said, “Many of us know that Blockchain is a topic that is hot at the moment. It's a topic that is disruptive and is accelerating. These sessions will focus on demystifying the technology and clarifying the differences between the hype around cryptocurrency (i.e. Bitcoin) versus the enabling capabilities of the underlying blockchain technology and its potential uses.”

Kersey went on to explain how Blockchain works: “Someone in a network requests a transaction, the transaction is broadcast to other computers (nodes) in the network. The network of nodes validates the transaction using agreed algorithms. The verified transaction is combined with other transactions to create a new block of data for the ledger and the new block is added to the network’s blockchain, in a way which is permanent and unalterable to which the transaction is complete.”

“From a business perspective, it’s helpful to think of blockchain technology as a type of next-generation business process improvement software. Financial institutions are realising that, after several decades of internally focused business process software investments, it’s time to look for efficiencies outside their own four walls. Collaborative technology, such as blockchain, promises the ability to improve the business processes that occur between companies, radically lowering the 'cost of trust.'"

"For this reason, it may offer significantly higher returns for each investment dollar spent than traditional internal investments. You cannot get the return by yourself; you must be willing and able to collaborate with customers, suppliers, and competitors in ways that you have never done before,” Kersey noted.

Robert Stanier, Banking Sector Leader, PwC in the Caribbean, who joined the panel discussion focused on The Regulatory Side to Digital Currencies at the forum noted, “From a Caribbean financial services and central banking perspective, one of the major issues we deal with is derisking.  Blockchain may be part of a broader solution set that offers alternative channels for banks and governments to address derisking concerns for the Caribbean region.”

 “We discussed how blockchain and technological innovation can modernise and improve commercial and consumer payment infrastructures, create greater transparency for all parties to better inform monetary and fiscal policies,” Stanier added. “In addition, blockchain can be a key pillar in the prevention of fraud, which in turn supports the confidence in regional regulatory regimes and their ability to combat money laundering and terrorist financing.”

Earlier this year in March, Oliver Jordan, PwC Partner and lead for Advisory services in the East Caribbean, executed a memorandum of understanding (MOU) with the Barbados-based FinTech company, Bitt, whereby the two entities, while remaining independent, would work together to deepen the use of blockchain technology across the Caribbean. Commercial banks, central banks and other institutions seeking to pilot Bitt’s software will benefit from access to PwC’s deep, global Financial Technology expertise in blockchain research and knowledge, marketplace strategy, operational readiness and technology services.

Jordan noted, “Blockchain is now more than an emerging technology that has numerous potential benefits to consumers, businesses and governments alike. It's inherent security and audit capabilities lend it to a myriad of uses including payments, smart contracts, cryptocurrencies, authentication and verification functions and a host of yet to be developed new opportunities. Blockchain may be one of the solutions to the ever increasing cost of regulation and compliance faced by many industries, which benefits both industry and government.”

Peter George, Chairman of Bitt, said “The purpose of the event was to bring to light the benefits of adopting blockchain technology for central bank issued digital currency and the dynamic benefits that such a move will bring, including addressing many of the various challenges of managing currencies in the region.”