Can blockchain fix banking?

Rage Comment : The hardware and software in the current banking structure have decades of history. These hardware and software are randomly pieced together. Such a structure is already very outdated and vulnerable to attacks. Previously, Bangladesh Bank lost $81 million because of this. The banking structure needs a timeless and flexible blockchain application Vault to enable communication between banks, eliminate fraud in transactions, and increase transaction speed. It is a tough battle to get bankers to accept bank repairs, but given the various risks, now is the best time to transition to blockchain.

Translation: Nicole

Many former Googlers think their version of blockchain can fix the banking industry. That fix is ​​long overdue, as banks have been suffering from a real-world crisis.

Indeed, you’d be surprised to learn that banks are one of the last sectors of the global economy that have not been touched by modern technology, and of course banks are learning about iris scanning technology that consumers are facing. Some banks even want us to use our smartphone sensors to log into ATMs. While cool, these efforts are undoubtedly putting lipstick on a pig—a waste of time. The real problem lies in the current banking structure, which has decades-old hardware and software that are haphazardly cobbled together like Frankenstein and the Mummy. Such a banking structure is extremely outdated.

In February, hackers stole $81 million from Bangladesh Bank by using malware to attack the ancient SWIFT system. Once they had a set of SWIFT codes, it was easy to reroute funds from the Federal Reserve Bank of New York to their own bank accounts in Asia. And it got worse: they even tried to steal $951 million.

Paul Taylor and Will Montgomery have experience building complex software. Taylor developed the speech & text code at Phonetics Arts, which Google acquired in 2010, but the seeds of his revolution have taken root throughout the ecosystem. Montgomery was one of the engineers who made Adsense, Google's commerce engine, a success. Together they founded Thought Machine and have worked with more than 50 engineers over the past two years to develop the Vault OS platform.

The Vault platform is designed to help banks communicate with each other through a future-proof and flexible blockchain application. The concept is simple: blockchain is a secure open ledger system that cannot be tampered with. This means that anyone can see the transactions on the chain at any time. All these silent eyes and cryptographic technology can eliminate fraud in transactions while increasing transaction speed.

What makes Vault different from ordinary blockchains is centralization. One of the main security features of traditional blockchains is that no one can directly control the chain. Instead, transactions are completed on a series of unrelated computer systems. Vault OS will run on Think Machine's cloud-based server network.

While abdicating responsibility may seem like a risk-taking move to the typically risk-averse banker, Thought Machine offers a host of benefits. In addition to keeping banks in compliance with regulations, the company promises to make embarrassing IT mishaps less likely, and its new capabilities will allow banks to offer personalized consumer products.

For example, a consumer could instruct the software to create a loan that automatically increases mortgage payments over several months, thereby reducing expenses. Thought Machine likens the idea to Nike ID, which lets consumers choose the color and material for a custom pair of shoes.

Taylor and Montgomery know that getting bankers to accept bank repair will be an uphill battle, but given the risks, now is the best time to transition to blockchain.