Nagarajan said in an interview that IBM has been working with Bank of Ayudhaya and Kasikornbank on mobile commerce, which is expected to grow rapidly after the Bank of Thailand recently switched on the greenlight for banks to operate e-commerce platforms.
According to the central bank’s regulations, banks are not allowed to be involved in manufacturing activities, but they can operate digital platforms as the marketplace that matches buyers and sellers.
Kasikornbank said earlier it has more than 7 million mobile banking customers who are potential buyers as well as a large number of small and medium enterprise (SMEs) and other business customers who are manufacturers of various products and services.
Nagarajan said the role of banks is shifting towards being the “endorsers” of trust among clients as blockchain and other related technologies have been adopted for the new generation of mobile commerce.
Using the decentralised record-keeping software and smart contracts along with artificial intelligence and machine-learning programmes, the new generation of e-commerce transactions will be driven in real time by the massive amount of data.
E-payment, digital money transfer such as the Ripple service, and real-time settlement of digital assets, among others, has also benefited from blockchain and smart contracts.
According to Nagarajan, the highly-secured blockchain software will create a new form of trust in trade and financial services with increased transparency as the technology also leads to faster settlement and improved business liquidity and supply chain management.
Besides commercial banks, stock and other securities trading as well as insurance services will also benefit from the technology.
The Thai government and private sector have joined forces to create a national digital ID platform as a key pillar for the digital economy.
Nagarajan said Thailand also has its competitive advantage as a regional medical hub and major player in tourism, which can use new technologies to better screen foreign visitors prior to their arrival and speed up insurance payment.
While blockchain is best known as the technology behind Bitcoin and other digital currencies, he said, the decentralised record- keeping software has a very diverse range of applications.
Due to its delegated trust structure, blockchain holds the potential to replace the traditional model of banks and financial institutions so the latter have to shift to be endorsers or conductors on the digital platforms that use blockchain and smart contracts.
IBM Global Finance, for example, has provided such a service to food and other industries in the US and other countries with Walmart and Dole among the major clients.
In the food industry, blockchain and smart contracts act like a food trust for product and raw material traceability to ensure consumer safety, while inventory and pricing management become more dynamic as all stakeholders can more efficiently manage their entire supply chain and delivery service while rationalising retail shelf space as well as waste management.
He said IBM also works with major international shipping line Maersk and chemical giant Dow to digitalise global trade as all shipping documents are now on the blockchain and in smart contracts.
The same technology can also be applied to logistic document, healthcare records and insurance document, among others.