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The New Era of Blockchain – Innovation made Usable

October 10, 2017 - Shweta Shivaraja Product Manager, Infosys Finacle


Blockchain is fast coming of age in the banking and financial services industry and its potential can be fully leveraged by selecting the right use. This sentiment is echoed across industries, with many large banks looking to exploit it for multiple use cases. However, blockchain in its true avatar may not be entirely suitable for highly regulated financial institutions. Hence, a new breed of blockchains is cropping up to meet financial institutions requirements.
Financial institution’s (FIs) priority has moved from understanding blockchain’s potential to what further needs to be done for a blockchain to work within the regulatory boundaries of the industry. Their aim now is to meet the key aspects that a financial institution requires in order to use it effectively. Three broad areas are emerging in the ‘New Era’ blockchain architecture.


  • The pseudo-anonymity of the blockchain does not work for FIs, where ‘identifiability’ is key
  • To meet regulations like KYC/AML and FATCA, FIs need to be able to identify and pinpoint the identity of the nodes
  • This is addressed by including the ‘real world’ identity to the blockchain address based identity
  • ‘Auditability’ was always a strong point of traditional blockchains, but with ‘identifiability’, it gets stronger
  • FIs can take this further and build a fool proof repository of identities on the blockchain


  • A public blockchain gives very little control to its participants and is truly democratic in nature. This does work in many cases as FIs need to be able to exercise control on several aspects, especially in the financial regulation space. Therefore, the need and the proliferation of private networks (or consortiums)
  • Such networks allow control to a group or an individual organization to decide who can participate, how consensus on viewing rights, membership and frequency of validations can be arrived at
  • Such a permissioned environment brings in certainty, predictability, and accountability into the blockchain based system

Asset Agnostic

  • The concept of creating value on the blockchain has been a point of controversy from the time of its inception. Regulators have mostly taken a negative stance on the ‘value’ aspect while being open to the blockchain itself
  • Thus, a blockchain which is not tied to one asset (that is created on the chain or otherwise) is an ideal way forward
  • Such chains allow FIs to transfer legal tender/instruments/documents or any other asset which can be digitized

These adaptations of the blockchain make it extremely attractive to the financial industry. The FIs can now focus on the use cases that interest them most, rather than worry about the suitability of the underlying technology. Key considerations for FIs to look at for developing use cases would be regulatory constraints, the readiness of the ecosystem and of course the nature of the process/area that is under consideration.

Shweta Shivaraja

Product Manager, Infosys Finacle

Shweta has over 12 years of experience in information technology and banking. She currently works with the Finacle Product Strategy Team. She is passionate about studying the key trends shaping the banking sector, and helps define the roadmap and product strategy for products in the Finacle suite.

More blogs from Shweta Shivaraja >

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