In what is being called a world first, Polish bank Alior is forgoing private, permissioned ledgers in favor of the ethereum public blockchain to develop a document authentication system for its customers.
Banks have previously been wary of public, permissionless blockchains, instead favoring permissioned systems based on current blockchain platforms.
“Our mission is to be disruptive, so we want to provide innovative solutions, and we want other banks to follow us as well,” Tomasz Sienicki, the blockchain strategy lead at Alior, told Forbes.
“We welcome if somebody copied our solution… We are showing that it’s possible to use public blockchain even if some people think it’s impossible.”
Convenient and compliant
Financial regulations in Poland played a major part in the Warsaw-based Alior’s decision to use a public blockchain for their document authenticator project.
The country’s laws require the public to have access to all documents from a bank in a durable medium. In a ruling handed down in 2017, Poland’s Office of Competition and Consumer Protection deemed a bank website as an inadequate information delivery system since the data on it could easily be changed.
This is what prompted Alior to explore solutions that would provide customers with the convenience of online banking while still complying with local regulations.
“We want people to verify that we did everything right and we don’t conceal anything. If we say the documents are actually verified and authentic, everybody can check it and confirm,” Sienicki said. “That’s not possible using a private blockchain.”
What emerged from the bank’s research is its Blockchain Center of Excellence, which was established in October 2018. The document authenticator is the department’s first blockchain project.
“It was born in our innovation lab, but later on, we managed to convince our management that a dedicated team should be set up on just blockchain issues,” said Sienicki, who leads the department.
“Everybody can copy this code and use it for his or her purposes. We encourage people to do so.”