IBM Center for Blockchain Innovation - Projects
Researchers at ICBI are currently focussing on following projects:
Shared Know Your Customer (SharedKYC)
The KYC onboarding process is an expensive and inefficient process for banks, especially for their corporate customer accounts. Each time a corporate wants to open an account, it goes through a tedious process that requires submission of numerous documents, for example, legal documents for proof-of-existence of the corporate and personal documents of its executives. Generally, there is a wait time of several weeks before a bank account is established, leading to a poor customer experience for these customers.
Moreover, large corporations deal with many banks; for instance, IBM as a corporate client deals with over 90 banks in Asia Pacific alone. Thus, they need to repeat the onboarding process with each bank they deal with. In addition, they are subject to periodic refresh of these documents, every one-three years depending upon the regulatory requirements, which means they should undergo the same tedious process again for all the banks they are associated with.
Furthermore, changing regulatory requirements around anti-terrorism and anti-money laundering, make things even more complicated for the banks who need to comply with the new requirements.
Banks can achieve increased efficiency and effective regulatory compliance by sharing the KYC data and hence there is a strong need for a shared KYC solution. To leverage on the shared customer information through the KYC solution, banks have to be a part of the blockchain business network.
This project was kickstarted to streamline IBM internal cross border transactions managed through intercompany agreements but has gained widespread attention due to the applicability of the use case to any large Multi National Company (MNC). The intercompany transactions for any global MNC can be challenging to deal with due to a very complex operating environment. There are number challenges like:
- Large volume of transactions for global enterprises
- Introduced need for compliance with many local regulatory authorities and may lead to greater regulatory scrutiny by these authorities (for example tax authorities)
- Centralized business service centers / hubs may be required to streamline the charges
- Three major business functions Accounting, Tax and Treasury may need to collaborate increasing complexity of business operations
Although many companies use central hubs to process billings for intecompany transactions to centralize the services and save costs. In context of services, the central hubs accumulate & aggregate billing expenses from performing countries and allocates them to requesting countries. This can lead to further challenges like:
- Due to aggregation, charge & service flows are separated, leading to loss of resolution from where a particular charge originated
- Reduced visibility into the expense lineage
- Supporting documents (audit compliance evidence) may be scattered across siloed systems in different countries and retrieval may be challenging at the time of audit
- Tax deductions for intercompany transactions may be disallowed if sufficient evidence is not provided during audits leading to disputes. Additional work necessary to improve tax audit defense
Blueaudit provides a solution to manage and record such transactions in a secure and immutable way by leveraging the capabilities of Hyperledger Fabric. It also provides end to end visibility into the intercompany expenses for any MNC.
Intermodal Transport Logistics
The success of every global supply chain relies on the effectiveness and efficiency of its transport integration. Global supply chains today are becoming increasingly reliant on intermodal transport systems to move goods across the nodes due to its effectiveness and reduced cost. A transportation system is only as effective as its planning and management. The process of planning and managing an intermodal transport system becomes more complex with the addition of new decision makers and use of additional modes of transportation. Lack of or poor coordination in planning, communications, and implementation of transport logistics and services between the decision makers can and will severally impact and propagate throughout the entire supply chain, affecting efficiency, effectiveness and delivery time.
Using Blockchain, the team is working on a transparent and fair capacity reservation system with end-to-end container visibility for a train-ship-truck route. In the Blockchain Industry Network for Intermodal Transport Logistics, all participants will have:
- Instant, secure access to end-to-end supply chain information; single source of the truth
- Fair, trusted and tamper-proof flow of information
- Better risk assessments and fewer unnecessary interventions
- Permissioned access control with traceable transaction history
Blockchain will enable all ecosystem participants such as shippers, shipping lines, freight forwarders, train operators, truck operators, terminal operators and regulatory authorities to have visibility and a secure means for information sharing of the goods flow and commerce. This also enables better decision making for the various ecosystem players involved and serves to facilitate and promote trade in the region.