The promise of blockchain technology has been hyped as revolutionary in the area of digital currencies and international payments. Recently however, other facets of the technology are coming to light, one such example is the partnership announcement between Cognizant and Mizuho Financial Group that will see Cognizant leverage the ledger technology to provide a means of verifying and securing digital document signatures across its global operations.
Mizuho Financial Group was founded in 2003 and has since grown to a staff of more than 56,000 working from 900 offices inside and outside Japan. The holding company, which controls a range of subsidiaries, has as part of the group concerns in banking, trust banking and securities, and other financial services related businesses. Collectively Mizuho Financial Group has assets of more than $1.5 trillion under management.
As part of Mizuho’s deal with Cognizant, the consulting and technology firm will seek to leverage blockchain technology to create new work processes to make Mizuho’s transactions and digital interactions more secure, transparent, efficient and cost-effective. Another area set to benefit from the deal is customer experience, with Mizuho eager to tap into the changing demands of consumers globally – a recent study by KPMG finds that poor experiences are costing banks billions in foregone revenues.
Blockchains have been getting considerable press in recent years, touted by some as a underpinning a new form of global currency, while others see it as a unique way to transfer and validate information. One of the defining characteristics of the technology is its public, and distributed, ledger. This ledger is stored on the network as a whole and is almost tamper proof by virtue of its decentralised means of verifying records. The technology promises to improve the security of international transfers as well as reduce oversight costs.
The deal will see Cognizant combine its consulting and digital technology expertise to develop a blockchain solution for Mizuho's stakeholders. Rather than being used as a means of exchanging currency, the technology will be leveraged to create a workflow for exchanging and signing sensitive documents in a secure and transparent manner. The result of the solution will – according to the partners – provide a faster, more efficient processing and multi-party verification of signed documents across a range of jurisdictions – with an initial focus on connecting key Mizuho group company hubs between New York and Tokyo.
“Blockchain technology is a game-changer for the financial services industry,” says Prasad Chintamaneni, President in Cognizant’s Financial Services unit. “We continue to invest in our blockchain capabilities and are going beyond cryptocurrencies into newer areas such as smart contracts and P2P transactions. This agreement will pave the way for increased adoption of Blockchain technology at Mizuho Financial Group to minimise counterparty risks, speed up settlements, improve contractual performance, and enhance regulatory reporting.”
Toshitsugu Okabe, Deputy President and Executive Officer of Mizuho Financial Group, says he is “pleased to be among the early adopters of blockchain technology in Japan,” a move which he believes will make the firm’s processes and workflows “faster and more efficient.” He adds: “We are impressed with Cognizant's blockchain-based solutions for financial services organisations, and their sharp focus on this rapidly evolving technology.”
Interest among consulting firms in the potential of the blockchain has been on the rise recently. Big Four giant PwC for example recently opened a dedicated blockchain practice in Belfast, while rivals such as Deloitte and Capgemini Consulting too have made strides in developing their capabilities in the field.