How does blockchain change the banking industry? A complete overview of the blockchain path of state-owned banks

Babbitt, from December 7th to 8th, the "Blockchain Technology and Application" Science and Technology Frontier Forum hosted by the Chinese Academy of Sciences and jointly supported by the China Academy of Information and Communication Technology was held in Shenzhen.

At the Blockchain Finance Forum on the 8th, heavy guests from financial institutions such as China Everbright Bank, China Merchants Bank, China Re Group, CCB Jinke, China Development Bank, Industrial and Commercial Bank of China, WeBank and other financial institutions shared the block Exploration and Practice of Chain Technology in the Financial Field.

Through this forum, Babbitt found that, unlike the common "historical burden", many domestic banks have an open, positive and optimistic attitude towards blockchain technology . They invest in or independently develop a blockchain application platform to accelerate application landing and build a blockchain ecosystem in a cross-bank cooperation manner.

The following is a selection of conference content, organized and published by Babbitt.

China Everbright Bank

Yang Bingbing, Chief Business Director and General Manager of Digital Finance Department of Everbright Bank, gave a speech entitled "Explore the Application of Blockchain in the Banking Industry".

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Yang Bingbing is a veteran of China Everbright Bank. As early as June 29, 2014, he was the general manager of the Information Technology Department of China Everbright Bank. The impact of blockchain technology on finance, he once said,

"Bitcoin has undergone a radical change from the type of currency. If this change allows it to continue to grow, I think it may have a transformative impact on the financial field. Of course this is also technology, but it does this It's not a side ball, it's a revolution at the bottom. "

In his speech on the 8th, he first reviewed the milestones of domestic banks in the field of blockchain exploration from 2016 to 2019, and stated that "blockchain technology has reshaped the trust mechanism and is restructuring the basic model of financial interaction . "

He believes that "From the policies related to blockchain issued by China in the past three years, we can see that China has two main directions for developing blockchain: one is to promote the development of the blockchain industry, and the other is to prevent and resolve financial risks. Technology Innovation and risk prevention are carried out in an interaction. On October 24, the General Secretary proposed that blockchain be an important breakthrough in independent innovation of core technologies. This is the direction of the development of the blockchain industry. "

Subsequently, he shared the exploration and practice of China Everbright Bank in the field of blockchain. There are three stages:

1. Chain cooperation , "focus on the big, start on the small", on the one hand, join the alliance chain in the form of nodes, and on the other hand, join the blockchain-related alliances.

2. Partial pilot , "business integration, pilot advancement", applying blockchain technology to online loan electronic contract depository and fund custody business.

3. Platform exploration , "considering efficiency and effectiveness", launching "sunshine blockchain" innovative digital financial tools. When it comes to the application of the blockchain, it is nothing more than matching the technical characteristics of the blockchain with specific business pain points. Yang Bingbing believes that in the process of commercialization of the current blockchain, there are technical limitations in terms of efficiency, security, and operation and maintenance.

Nevertheless, he is still optimistic about the application of the "Sunshine Blockchain" in the subdivisions of online loan asset securitization, cloud payment e-wallets and new transaction banking services. Among them, Babbitt was impressed by the structure of the new transaction banking service, as shown below:

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Finally, Yang Bingbing pointed out that there are five aspects worthy of attention in the exploration of the application of blockchain in the banking industry:

The first is legal compliance, and the response methods include pre-compliance checks on transactions and information; integrated off-chain compliance services; and development in strict accordance with laws and regulations, especially in cross-border, financing, and digital currency.

The second is basic authenticity, and the response methods include paying attention to the quality of the on-chain information itself and reducing the risk of fraud; combining 5G, Internet of Things and other technologies to promote three-stream integration; combining on-chain and off-chain, verifying authenticity through off-chain centralized institutions .

The third is a new type of risk. Coping methods include smart contract and other low-level innovation areas, establishing a code review mechanism; building new systems and data migration to strengthen security; and strengthening partner's operational risk identification.

The fourth is the access mechanism. The response methods include the real-name registration mechanism of the account; the on-chain account is integrated with the off-chain identity management system.

Fifth, data security. The response methods include strengthening the construction of data governance systems and mechanisms; data access isolation and privacy protection; and strict implementation of relevant regulations on data security.

China Merchants Bank

Zhou Tianhong, general manager of the information technology department of China Merchants Bank, delivered a speech entitled "The Road to Commercial Development of Blockchain Applications."

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Zhou Tianhong participated in compiling the "China Blockchain Development Report (2019)", in which he stated that the banking industry is a special industry and has high requirements for system security and data confidentiality. Banks are more cautious about blockchain. Compared with the benefits brought by the forerunner, banks are more afraid of the price that must be paid to become the forerunner.

Sharing on the spot on the 8th, he showed China Merchants Bank's prudent attitude towards blockchain.

Zhou Tianhong believes that although the alliance chain can play a role in the fields of certification, information sharing, and supply chain finance, there are still difficulties in coordination, low reuse, large resource loss, complex network management, high maintenance costs, and small service scope And other issues. Under this background, China Merchants Bank has created an open license chain-"standard sub-chain" in cooperation with multiple units.

The relevant participants of the standard sub-chain can be business customers, DApp developers, or node operators. The architecture diagram is as follows:

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Zhou Tianhong revealed that the current standard sub-chain has provided three environments of development chain, test chain and mainnet, providing user registration, standard sub-apps, basic technical services, and basic business services. The main network already has 5 node operators. More than 10 nodes were deployed, TPS was 5000+, 5 DApps were launched, and the number of users exceeded 5,000.

In the second half of the speech, he focused on popularizing the concepts of stablecoin and DeFi, and concluded that

"The application of alliance chain can strengthen the exploration in the direction of combining with the real economy, innovation of digital economic model, people's livelihood, data sharing, etc. As a new option, standard branch chain can simplify the application exploration process and promote application development. Its basic value needs attention and attention. While financial innovation of the public chain, it is necessary to fully consider possible risks and ensure financial security and stability. "

China Re Group

Feng Jian, general manager of China Re Group's Information Technology Center, shared a speech entitled "Blockchain + Reinsurance Logic".

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Feng Jian's understanding of "industrial blockchain" is impressive. He believes that

There is a fundamental difference between "block chain + industry" and "industry + block chain". The former uses the blockchain as the underlying support technology. The focus is on decentralization, platformization, and distribution. The essence is the transformation of traditional industrial logic. ; The latter is to use blockchain as a technical means, the focus is to improve efficiency, the focus is on the technical application of industrial scenarios, and blockchain is not the only means. In addition, the combination of blockchain and actual business has also caused fundamental changes to traditional business management.

Then, he listed the application exploration of China Re Group in the blockchain field, as follows:

"Easy fundraising" platform : Real-time online access to underwriting, claims, reinsurance and other business data through the blockchain, and sharing among sales channels, direct insurance companies, and reinsurance companies.

"Nuclear Star" platform : This is a blockchain-based nuclear business platform system covering key business links such as negotiation, underwriting, claims settlement, billing and settlement. All domestic businesses of the Nuclear Community in 2019 have been processed online.

Direct insurance reinsurance blockchain trading platform : Optimize the existing reinsurance transaction business process and open the data channel for direct insurance reinsurance.

White disaster platform : Based on the blockchain to form a platform to deposit certificates, trigger automatic claim settlement conditions, and use the shortest time to enter compensation into the herder's account. In fact, reinsurance is an area with complex processes, long cycles, low efficiency, and lagging risk management. A distributed information sharing platform based on blockchain can greatly improve the efficiency of traditional reinsurance during the New Year and seamlessly achieve insurance demand and supply. Butt. Feng Jian believes that the quantitative changes brought about by technology will lead to qualitative changes and change in the relationship between industry, insurance and reinsurance, including:

In terms of business concepts, reinsurance risk perception has been grasped in real time from the original hindsight to the present.

In business management, the process is online, data flow and capital flow are traceable, and compliance requirements are met.

In technical innovation, the widespread application of technologies such as consensus mechanisms and smart contracts has further promoted co-governance of the alliance.

CCB Jinke

Wang Xue, the head of CCB Jinke Innovation Lab, gave a speech entitled "Blockchain Application Practice".

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CCB Jinke was restructured from 7 development centers and 1 R & D center directly under the CCB system. It is the first fintech company established among large state-owned commercial banks.

According to Wang Xue, CCB Jinke has developed an enterprise-level blockchain BaaS platform to support application scenarios such as trade finance, asset securitization, supply chain finance, electronic certificates, data sharing, housing leasing, and ministries' provident funds. She focused on CCB Jinke's blockchain practice in three areas of trade finance: trade finance, blockchain leasing, and a blockchain housing provident fund data platform.

In terms of trade finance, CCB Jinke developed BCTrade and upgraded to BCTrade 2.0 in October 2019. The current platform participants include all domestic branches of CCB, about 13 overseas institutions, nearly 40 domestic peer institutions, and platform transactions. The amount reached 360 billion yuan.

In terms of blockchain leasing, the housing chain integrates multiple participants such as intermediaries, households, and supervision. It counts 9 housing rental platforms in 7 provinces and cities, and has more than 100,000 listings on the chain. It is now connecting 6 in 5 provinces Enterprise leasing platform.

As for the blockchain housing provident fund data platform, there are currently 303 provident fund centers in Tianjin, Chongqing, Guangzhou, and Shenzhen involved. There are 3.19 million on-chain unit accounts, 480 million detailed data, 6.6 billion personal account details, and 19.8 million CPF loan accounts. In Wang Xue's view, CCB's application in the blockchain field has four major advantages: rich industry application practices, complete financial service capabilities, leading data governance experience, and successful implementation experience in the government field.

China Development Bank

Hu Yong, deputy director of the Application Management Division of the Information Technology Bureau of China Development Bank, delivered a speech entitled "Inter-bank Cooperation Mechanism and Model Based on Alliance Blockchain".

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Hu Yong's speech is more special. He talked about inter-bank cooperation, inter-bank cooperation of the alliance chain, and China Development Bank's practice in the blockchain field. We can understand that the major banks will According to its positioning and capabilities, "according to local conditions" develops the blockchain business that is most suitable for itself. For China Development Bank, perhaps the most suitable one is to establish an inter-bank blockchain alliance platform.

Based on the inter-bank cooperation mechanism under the alliance blockchain, a new way of inter-organizational interconnection is provided through the "trust-cooperation-autonomy" model. Hu Yong stated that there are seven cooperation mechanisms among banks under the alliance blockchain:

The first is the organizational mechanism. An alliance is established between banks to be responsible for business liaison and major decisions among members;

The second is the consensus mechanism, where members work together to formulate business standards and technical specifications, and jointly build a blockchain platform;

The third is the incentive mechanism, which draws on the Ethereum Gas mechanism to encourage business participants, technology providers, and platform operators to ensure the sustainable development of partners;

The fourth is the joint development mechanism. Through joint development, with the advantages of each member, the development speed can be increased, project risks can be reduced, and project costs can be shared;

Fifth, the operating mechanism, the establishment of a new company, relevant parties involved in investment and shares, to jointly obtain the benefits of platform development, unified operation and easy management;

Sixth, the risk control mechanism guarantees technical security, controllability, and business continuity in inter-bank business cooperation;

Seventh, the supervision mechanism embraces supervision. Through supervision nodes, the underlying assets can be penetrated to ensure business compliance and legality. In terms of application, China Development Bank has developed the China Trade Finance Blockchain Alliance project and the BRICS blockchain smart signing platform.

ICBC

Su Heng, assistant general manager of the Industrial and Commercial Bank of China Software Development Center, brought a speech entitled "Development Sharing of Blockchain in the Background of Financial Supervision".

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Su Heng's speech is also very distinctive. From the perspective of global financial supervision, he led to the application and practice of ICBC's blockchain (that is, the "ICBC Seal Chain").

Since the international financial crisis in 2008, countries have continuously strengthened financial supervision, and overseas financial supervision has become increasingly stringent: the regulatory framework has become more complete; the regulatory requirements have become more stringent; and the regulatory intensity has been strengthened. In this context, higher requirements are put forward for the construction of the banking system:

The first is the protection of sovereignty, including the localization of customer information and the protection of key data privacy.

The second is transnational regulatory cooperation, including information sharing.

The third is the shorting of trading risks, including early warning in advance.

Fourth, anti-money laundering, including identity authentication access. The technical characteristics of the blockchain can precisely meet these requirements. To this end, ICBC has created an enterprise-level blockchain technology platform, "ICBC Seal Chain." This process is not easy. As the maturity of the organization increases, so does the maturity of the product. The ICBC Seal Chain has gone through five stages:

The first is the pre-research level, that is, the pre-research of the subject;

The second is the PoC level, that is, the PoC project is online and new functions are verified;

The third is product level, that is, to provide user-oriented deliverable products;

The fourth is the platform level, which is to build a technology and application platform and output user-oriented platform-level service capabilities;

Fifth is the ecological level, that is, cross-chain interconnection to form a service ecosystem. In terms of application, the "ICBC Xixi Chain" has been applied to the Guizhou Poverty Alleviation Investment Fund Management Blockchain Platform, Xiong'an Relocation and Resettlement Fund Management Blockchain Platform, China-Europe One-Single Cross-Border Trading Platform, Ningxia Smart Government Affairs System, Internet financing financial service system (ICBC e-letter).

"The benchmark financial regulatory requirements are an important reference for us to achieve the leap from an enterprise-level blockchain platform to a financial-grade blockchain platform. It is recommended to strengthen the pre-research and comprehensive use of technology, which is conducive to enhancing the comprehensive capabilities of the blockchain. In addition, A good user experience and perfect service and management capabilities are conducive to users' choice and use of blockchain products, as well as the promotion of blockchain technology. "Su Heng concluded.

WeBank

Fan Ruibin, the leader of Weizhong Bank's blockchain business, delivered a speech entitled "Broadchain Practice for Distributed Business".

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Weizhong Bank was established by Tencent in 2014. It is the first Internet bank in China and the first commercial bank in China to be recognized by the National High-tech Enterprise of Love.

Weizhong Bank began to lay out the alliance chain in 2015. At present, it has formed the largest open source ecosystem of domestic alliance chains. Fan Ruibin has proved this with data.

"60+ applications run in a production environment, 110+ members of the Golden Chain Alliance, 500+ ecosystem institutions / enterprises, 10,000+ individual developers in the ecosystem, 70 million inter-agency reconciliation platform transactions, and 1 billion judicial deposits Securities platform joint partners with stocks of deposits, 10.2 billion yuan of online lending institutions withdraw from the voting platform to vote on the principal to be received. "

Based on the open source ecosystem, Weizhong Bank has four main areas of exploration in the blockchain field, as shown below.

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Fan Ruibin believes that since centralized commerce, chain commerce, and shared commerce, distributed commerce will become mainstream, and blockchain technology is an important infrastructure to support distributed commerce.

Milestones of domestic banks in the blockchain field (incomplete statistics):

2016 year

In May, Weizhong Bank established FISCO.

In June, China Merchants Bank implemented the "China Merchants Bank Direct Payment Blockchain Platform" and passed the PoC verification test.

In November, BOC Hong Kong Blockchain Housing Mortgage Loan Project; Minsheng Bank announced that it has joined the R3 Blockchain Alliance.

In December, Zheshang Bank established a blockchain mobile bill of exchange. 2017 year

In January, CCB launched the blockchain international factoring business; BOC connected the blockchain e-wallet to the poverty alleviation sharing platform "China Public Welfare".

In February, China Merchants Bank's "Cross-Border Direct Liquidation Blockchain Project" was put into production.

In May, China Everbright launched the "Mother Water Cellar" blockchain charity donation system.

In July, ICBC applied for a patent for the financial asset trading system; the Agricultural Bank's e-commerce supply chain financing project went into operation; Minsheng and CITIC's BCLC platform went online.

In August, China Everbright launched the Pan-Sunshine asset management chain; CCB and IBM launched a blockchain banking insurance platform; CICC Yinuo's "blockchain + supply chain" financial platform went online.

In October, ICBC launched the Blockchain Management Platform (Guizhou) for poverty alleviation fund.

In November, the Hong Kong Bank of China / Weizhong / Shenzhen Bank of China Blockchain Cross-Border Wallet Project; CCB's first blockchain Forfaiting transaction.

In the fourth quarter, ICBC launched the first independently controlled blockchain 1.0 platform. 2018 year

In January, CCB launched the blockchain international factoring business and launched the first blockchain rental application in Xiong'an.

In February, Ping An of China launched the "One Account Chain".

In April, CCB launched a blockchain trading financial platform; CCB established CCB Jinke.

On the 6th, the first loan of Huaxia Bank's "Chain Xiong'an-Blockchain-Supply Chain" was successfully completed.

In August, the Bank of China independently developed a blockchain cross-border payment system officially launched (Xiongan-Seoul); GF launched a blockchain cross-border payment; Zheshang Bank released a receivables chain platform.

In September, CITIC's first domestic credit letter of credit business was launched.

In October, ICBC released a blockchain-based online supply chain financial product; Zheshang Bank's "Warehouse Receipt" platform went into production.

In November, CITIC, Minsheng and Bank of China launched the Blockchain Trade Finance Platform (Forfaiting); China Merchants Bank and Shenzhen Taxation Bureau issued the first electronic blockchain blockchain invoice. 2019

In February, Weizhong Bank and the Macao SAR Government reached a cooperation "WeIdentity" project, which was recognized.

In May, the Bank of Communications and CCB signed a blockchain trade financial cooperation agreement.

In July, China Everbright Bank and Ant Financial “dual-link” blockchain platform.

In September, ICBC launched the "China-Europe e-Single Link", the country's first cross-border blockchain platform.

In October, China Everbright, Bank of China, CITIC, People's Livelihood, and Ping An jointly established the Forfaiting trading platform. CCB launched the BCTrade2.0 platform and FTI (Forfaiting Index).