Chain-Finance got a chance to talk to Lata Varghese, Cognizant’s Sr. Director, Consulting, Banking and Financial Services, about blockchain for financial services.

How large is Cognizant’s Blockchain Consulting Practice? How fast is it growing? Are you hiring blockchain specialists?

Cognizant’s Blockchain Consulting practice is part of the Company’s overall Business Consulting area. Our Blockchain expertise includes vertical industry experts, blockchain technologists and enterprise architects. Blockchain presents an opportunity to rethink how various business processes might work more efficiently going forward. Cognizant’s vision is to enable our clients to identify and incorporate a decentralized architecture wherever applicable to cut costs and develop new growth opportunities using distributed ledger technologies. We are working with clients across the Banking and Financial Services, Insurance and other industries to explore blockchain, and advising them on developing distributed ledger technology and its applications.

What blockchain protocol(s) is Cognizant working with?

Cognizant has expertise and experience on leading open-source blockchain platforms and protocols in the market. The blockchain solutions we have successfully delivered to clients to date, and the blockchain technology accelerators and proof-of-concepts built by our technologists, were developed using a variety of blockchain protocols and platforms including Chain, Bitcoin Blockchain, Ethereum, Factom, Eris Industries, Storj, IPFS, BigChainDB. Additionally, we have built an ecosystem of strategic alliances to develop, market and deploy blockchain technologies for Cognizant’s clients.

There is significant movement by major global banks to blockchain technology, but most are working on permissioned ledger platforms.  Is this where the market is going to move? Or is there still opportunity or type of customers to offer open, permissionless blockchains?

Based on our work with clients, the financial services industry is currently concentrating on B2B applications, working with permissioned platforms, and focusing on performance as well as security. Once the industry shifts to consumer-facing applications, there may be increased use of use of permissionless platforms, depending on the use cases.

Will the banking system truly adopt a global standard, through R3 or Hyperledger, or will most banks develop their own “flavor” of distributed ledger?

Blockchain is a network technology and, to be successful, a large number of participants must utilize the network. In the financial services industry, a typical blockchain network caters to a specific use-case (or a set of use-cases). As such, multiple blockchain platforms could potentially co-exist in the financial services industry.  These platforms will each have their own standards and protocols while being designed to enable interoperability between platforms.

The number of potential use cases for blockchain technology is enormous. Applications such as trade finance, trade settlement, healthcare management, logistics, and machine-to-machine/ IoT systems have larger and larger data and transactional throughput requirements (as I list them). As you know,  the Bitcoin Blockchain cannot handle those requirement, and Ethereum despite all the hype is not there yet. What blockchain protocol, multiple chain or hybrid systems do you foresee being able to handle such high spec applications?

There are a variety of trade-offs that a blockchain platform has to make, based on the nature of the business network using a particular platform.  The two key trade-offs are security and performance. In the last 6+ months, significant progress has been made in improving the performance of blockchain protocols. Some chains claim to have achieved performance that is at-par or better than today’s transaction systems. While these claims are being substantiated, there is no doubt that a lot of progress has been made to resolve performance issues. As the industry moves forward, a combination of permissioned networks and an improvement in performance will set the stage for blockchain platforms suitable to handle high spec applications.

Cognizant formed a partnership with Mizuho Financial Group to develop a blockchain solution for secure record keeping among the Japanese financial group’s companies worldwide. Can you tell us more about what specific blockchain tech or protocols that you will use for that?

As part of Cognizant’s work with Mizuho, we coupled our financial services, consulting and digital technology expertise to design and develop a blockchain solution for secure record-keeping of documents among Mizuho Financial Group companies. The solution allows Mizuho companies to exchange and sign sensitive documents in a secure and transparent manner. Cognizant’s solution enables more robust record management, and faster, more efficient processing and control of access to documents.

Are there other partnerships or blockchain tech startups that you are working with or plan to in the short term?

Blockchain technology and application needs vary by client.  At Cognizant, we are making focused investments to strengthen our blockchain capabilities, develop innovative digital frameworks and building blocks to harness distributed ledgers, and create a world-class alliance ecosystem. As part of these efforts, Cognizant has been working with a variety of organizations and will continue to forge strategic relationships that will best serve the needs of our clients.