Channel Post speaks to Tabrez Surve, Regional Head of Security, Middle East, Turkey & Africa, F5 Networks, about the adoption of Blockchain technology across the region
What does Blockchain technology mean for the future of financial services in the region?
Blockchain’s central promise of new, ultra-secure measures for certainty and authenticity, without an expensive middleman, is an incredibly compelling proposition for this region and worldwide.
Some banks in the Middle East are already exploring blockchain to potentially transform their approaches to trading and settling, investment and capital assets management. Through blockchain technologies, banks and financial services will be able to process transactions with more efficiency, security, privacy, reliability and speed.
The global forecasts for the uptake of blockchain are sizeable. Research and Markets anticipates that by 2020, blockchain technology and solutions will be in use by up to 65% of enterprises. It is estimated that the value of the global blockchain market will grow from $210.2 million in 2016 to $2.31 billion by 2021.
Which industry verticals apart from financial institutions are looking at or in the midst of adopting the Blockchain tech?
The UAE has taken the lead in implementing blockchain technologies and the government is working to establish the country as a major financial technology (fintech) player and has already started to experiment with the potential uses of blockchain in the public and private sectors. Blockchain has the potential to truly multiple industries including retail, remittances, trade finance, and real estate to make processes more democratic, secure and efficient.
What sort of trends do you see in the region as far as the use of Blockchain tech as the future of the sharing economy is concerned?
The UAE plays a lead role in fostering innovation, and encouraging new processes and methods to build smarter cities; I believe the UAE will set the stage for Blockchain adoption across the region.
Is Blockchain really the future, or just a passing fad?
According to the Future of Apps, a recent report commissioned by F5 Networks, blockchain’s ongoing momentum hinges on significant technological advances, including edge computing and 5G. Demand for data security and transparency, combined with emerging business models built on blockchain technology, will likely drive more people onto decentralised applications and spur demand for more localised control over personal data.
Over the medium term, we should expect an accelerated uptake of application of blockchain technology and de-centralised apps, driven by the wide appeal of enhanced security and transparency in the continually evolving Internet of Things (IoT) era.
What sort of role does the government play in the overall adoption and use of Blockchain tech? Are there applications that are kept outside the purview of the Blockchain tech?
Encouragingly, the UAE government has been extremely supportive of blockchain technologies, launching its Dubai Blockchain Strategy in October 2016. This strategy establishes a roadmap for the introduction of blockchain in Dubai and the creation of an open platform to share the technology with cities across the globe.
What sort of challenges can companies / industries face when implementing the Blockchain tech on a large scale?
As many potential applications of blockchain require smart transactions and contracts to be indisputably linked to known identities, privacy and the security of the data stored and accessible on the shared ledger is a concern. Additionally, although blockchain offers tremendous savings in transaction costs, the high initial capital outlay could be a deterrent for enterprises. Integration concerns can also slow down implementation and cause initial hesitation. Moving ahead, regulators and governments must understand the technology and its impact on the businesses and consumers to help shape policy.
What sort of security issues can creep up during and post-adoption?
Humans are usually the weakest link when it comes to security. Blockchain removes the human factor entirely from the equation. By leveraging a distributed ledger and taking away the risk of a single point of failure, blockchain technology provides end-to-end privacy and encryption while still ensuring convenience for users.
The technology offers a totally different approach to storing information and performing functions, which makes it especially suitable for environments with high security requirements and mutually unknown actors. Private and public organizations are confident that this will bring added protection against cybercrimes which is why it’s so positively received.
How do you reckon companies and industries can keep such threats at bay?
The blockchain not only has a place in cryptocurrency exchanges but could also be used to improve security solutions. The blockchain is “no silver bullet” for security, but the technology holds promise as a way not only to record financial transactions but also as a means to control network communication, as well as Internet of Things (IoT) devices and supply chains.
When human error comes into play or an insider manipulates information or systems in the supply chain, the blockchain could resolve issues by automatically sharing any suspicious activity down the line. When everyone participating knows who is doing what, and when, lax security, errors, and insider threats can be tracked and hopefully dealt with before serious damage is caused.