In this week’s Insider Interview, WhitesPay talks to Gemalto’s Joe Pindar as we explore the introduction of blockchain and its imminent impact within the world of banking and finance.
Can you tell us about Gemalto and your role within the business?
Gemalto is the leader in digital security. Simply put we believe that companies should control access to their sensitive data, and if you do not have access - you should never be able to read the data. What that means is we provide identity, authentication, encryption, and key management to the largest banks, enterprises, and the service providers in the world. My role is as director of strategy in the CTO office working with Gemalto teams to identify future trends and make sure our products and services meet changing customer and market needs.
How is Gemalto developing blockchain to enhance their security offerings?
Gemalto is doing two things: firstly providing foundation security to blockchains, and secondly using Blockchain to secure business processes and future products. As Blockchain uses cryptography at its core, we have seen - with Mt Gox - what happens when these encryption keys are not protected and ultimately stolen by criminals. Gemalto products and services have been enhanced to support Bitcoin protocols natively allowing easy integration with Bitcoin, Hyperledger, and Ethereum blockchains.
Can you tell us about blockchain and how might it affect traditional security in the banking sector?
At its core, blockchain is a decentralised solution to the question - how do I make a deal with someone I don’t fully trust? Traditionally that has been done using a trusted 3rd party - like a bank. And for a fee the bank will act as the trusted intermediary between the two parties. Blockchain offers a different solution to this by asking a network of computers to come to consensus on which deals and transactions are trustworthy. This change in approach to look at the consensus of a group rather than a single expert is increasingly common in every day life. One way to think about the difference is in the event you want a recommendation - you are more likely to ask a group of friends and family, and gain an overall opinion of what is best to do than ask a solicitor for the best option. As a result many of the bank services based on acting as a trusted 3rd party, like escrow services, market making in shares, and money transfer could be disrupted.
Blockchain has become the foundation for cryptocurrency transactions, where else might we expect to see blockchain integrated?
The applications for blockchain are very wide. Any system or business process that is based on trust and has more than 3 parties involved is a potential candidate for blockchain. Where finance and crypto currencies are the first adopters of blockchain, there are advanced projects working on supply chain use cases for pharmaceuticals and food, and IOT networks in agriculture, telecoms, and automotive industries.
For the average man/woman on the street, how will they benefit from the use of blockchain?
Blockchain is over-hyped and people are too aware of it… simply put blockchain should be a hidden part of the infrastructure that very few people care about. In the same way few people worry about a relational database, it is likely that over time blockchain will become hidden to most people. That said, the impact of blockchain will be felt in user experiences where social validation and trust is used rather than a central authority. Some suggest that individuals will control their own identities and what they share with service providers, but the exact details of this are still being worked out.
How do you see the overseas payments and the currency industry integrating with blockchain?
Blockchain like infrastructures are ideally placed to solve international payments as there are many parties involved and the movement of money is highly dependent upon trust. Therefore the operation of this industry is likely to be changed from fee-based trusted intermediaries to significantly lower cost decentralised trust models. This is one of the first industries that have adopted blockchain as the benefits are immediately apparent, and the cost returns make strong business cases.
WhitesPay is a Midlands-based, foreign currency specialist. Our mission is to make international payments services faster, more transparent and cost-efficient through the use of bespoke technology and experienced individuals.