Australian Innovator Lakeba Group Вringing Rapid Commercialisation of Blockchain Technology
Originally published on: CoinSpeaker
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April 27, 2018
Blockchain has become one of the hottest trends of the last year. The non-trivial progressive technology has gone into the public domain. Professionals understand the mechanics of the blockchain technology, but getting the basis right, is becoming knowledge-critical for businesses. Given the emerging nature of this technology, it is small wonder that blockchain as a whole has been the cause of much speculation, hype and scepticism.
It is impossible to overestimate the potential influence of the blockchain-based projects becoming a part of the traditional economic system. However, while most of the projects are still at the concept stage, it is positive to see the situation gradually changing.
The blockchain technology offers significant potential for the banking industry. The benefit of this technology in terms of its transparency, security and speed has the potential to solve the wide raft of operational problems traditional banks face. Recent research by the current Australian Government-initiated Royal Commission into the banks showed that the prevalence of liar loans and fraudulent income statements is leading to a decline in the trust that consumers and bank customers have in the loan brokering and private wealth areas of the industry.
Lakeba – The Engine of the Blockchain Technology Innovation
The future of business organizations are expected to rapidly evolve from where we are now. Recently, the well known authority on the blockchain – J. Casey and Paul Vigna – published the paper “In Blockchain we Trust”. This work confirms the fact that the legitimacy of Blockchain is constantly growing and the new decentralized approach to accounting offers the potential to drastically reduce the cost of trust.
The IT industry is more flexible than the traditional banking institutions and the reason why this new technology has significantly developed in this sphere. A positive example of this is IBM which is stimulating the development of the blockchain technology with an attractive offer: blockchain start-ups have been given free access to IBM’s cloud. The trust of the tech giant in the new technology is helping to nurture this fledgling technology with no cost blockchain clouds now using about 60 of their data centers.
Even though the technical side of the blockchain technology is undergoing rapid development, many sectors that could potentially benefit from implementing the blockchain-based solutions are still in the exploratory process. The more risk-averse organisations want to gain a clearer unerstanding of all the advantages and disadvantages of blockchain – leading to a perception that reflects poorly on the blockchain implementation and commercialization.
One of the key steps in building a bridge between the pure technology and its usage is the ability to demonstrate its value and today the process of moving from concept to reality is greatly improving and becoming easier. An Australian start-up, Lakeba Corporation is bridging the gap between the ideas and implementation stages and helping businesses to adopt the blockchain-based solutions.
Lakeba Corporation is a fast growing reverse incubator and established start up based in Manly, Sydney. Its story started back in 2013. Since then, the project has become multinational as it unites over 120 developers from all over the world: India, Italy, the UK, USA and Australia. The company is helping companies from raft of industries to adopt the blockchain technology in all its forms. The key priority for Lakeba is targeting those sectors that can significantly benefit from blockchain, such as the financial services markets, energy, travelling and tourism, and the supply chain management sector.
“Lakeba’s structure and approach to innovation is different to any other company. The firm has built a dedicated Blockchain team – located in Italy, Sydney and India – focused wholly on building Blockchain solutions. And because our business has the cultural mindset of a start-up, and inherently flexible in the way it responds to market forces, there are a number of simultaneous ventures and development work being carried out across a diverse range of industries,” said Giuseppe Porcelli, Founder and CEO of Lakeba Group.
“Having spent the last five years building and driving solution-based conversations with marketing leaders, CEOS, and CIOs, this has helped our organization to build a resilient and accelerated capability for building Blockchain solutions. At the heart of our capability, Lakeba inherently understands the context of the user, what industry needs and how to scale these new technologies into profitable use cases, allowing Lakeba to take first mover position and moving rapidly with clients to commercialize and implement these new services at scale,” he added.
The company has been actively working in the sphere during the last few years. Its experience and the willingness to develop has created a strong competitive advantage for Lakeba Group.
“This mix of commercialization experience, technology, and development capabilities provides 24/7 software development, and a turnkey service to identify and accelerate innovative ideas and deliver them to markets across the globe,” said Mr. Porcelli.
Lakeba Group has developed its own approach towards the integration of the blockchain technology for a number of industries. Every project for every organisation Lakeba is working with, is fully customised and designed to best suit the operational environment for which they’re designing these blockchain solutions. This results in the team securing a high degree of faith and confidence in their innovation.
“In conceiving and working together with clients on very specific business and operational challenges, we’ve been compared to some of the larger consulting firms and this is not who we are. Instead, we thrive on the creative process of discovering what the many challenges are, and then investing our own time and development effort to conceive the solutions. This is reverse innovation at its most efficient,” Giuseppe said.
He continued: “Once we have cracked the blueprint for the technology solution we circle back to the client and partner with them to implement this into their business. This level of partnership means we desire the success of the solution as much as the organization we are building these solutions for. This also gives us the scalability to take that solution to other industries in other markets.”
Blockchain Against Fraud – Spotlight on the Banking Industry
The lack of transparency and security has always been a problematic issue for the banking industry. The sophisticated consensus protocols built into the Blockchain technology platform may open the new era for this traditional industry.
The problem of fraud has affected most of the modern banks. The decline in the institutional trust of the banking industry presents an ongoing industry challenge, directly leading to profit decreases and reputational harm. Governmental authorities have intervened to address the situation – the current Australian Federal Government Royal Commission into the banking industry is lifting the lid on banking malpractice and in doing so, consulting with industry and customers, to implement new and more robust regulation to help mitigate loan fraud and negligent behaviour in the brokering and wealth management sector.
Global banking giant UBS recently provided damning statistics: noting that up to a third of all Australian mortgages could be fraudulent. The numbers speak for themselves: the percentage of “completely factual and accurate” mortgage applications fell from 72% in 2017 to 67% this year. When converting the percentage to the actual sums, the facts are even more dramatic: around $500 billion worth of outstanding home loans contain misstatements about incomes, assets, existing debts and/or expenses. That means that 29% of the total and 18% of all private sector debt home loans in Australia are fraudulent.
Another data point which further demonstrates the scale of the problem is mentioned in the 2016 Report to the Nations on Occupational Fraud and Abuse issued by the Association of Certified Fraud Examiners (ACFE): ), the total loss caused by fraud events in 2016 exceeded $6.3 billion, with an estimated 5% loss of annual revenues in a typical organization.
Document Fingerprints Provide Immutable Records
Lakeba Group provides an effective solution for validating the origin, integrity and content of pay slips or any other financial document – Blockchain Against Fraud (BAF). This solution is a Blockchain protocol which can be used by payroll outsource providers or the financial services sector.
This technology will give the industry an opportunity to significantly reduce the level of current fraudulent loans and unintentional human errors. The system is aimed at preventing these kinds of situations which is always preferable to dealing with the consequences.
The mechanics of BAF is centred on transparency. Payroll data is provided by the service providers and added to the blockchain. It turns the raw data into a unique document fingerprint which cannot be changed. Further the document fingerprint cannot be reverse engineered to provide the payroll data – which makes it absolutely safe to store this kind of information.
The process goes like this: when a financial services organization needs to validate pay slip information, it converts it into a document fingerprint with the help of the same process. Than the token is validated on the blockchain and returns an unequivocal answer to the request.
The usage of the document fingerprint is solving several problems at the same time. First, no raw data is submitted which in of itself minimizes the risk of fraud. Secondly, faking the request response becomes practically impossible as the system will not allow this.
Lakeba is making the most of the decentralized nature of the blockchain. Every payroll is authorized by a network of computers based on the set of pre-specified rules. There is no ‘central’ computer in this scheme which means this enables immutable record keeping. This approach to verifying and storing data effectively prevents the interventions of the fraudsters in the system. Significantly, the pre-set rules help to greatly reducing the risk of human errors.
A further benefit of the technology is that it prevents the creation of the fictitious transactions or backdating of documents meaning the transparency and security of blockchain prevents most of the traditional fraud attacks. It also suits the modern model of globalization as the blockchain technology provides forensic accountants with an opportunity to access and examine the material related-party transactions generating no risk for the other party.
A More Transparent Future for the Banking Industry
Lakeba Group believes the current stage of the blockchain development is only just the beginning of massive technological change for a number of industries.
“The pace at which we’re developing these Blockchain solutions has incalculable potential, not just for the banking industry, but for any other industry that requires tamper proof record keeping, including professional services groups such as the legal and accounting professions,” said Giuseppe.
He continued: “With several live pilots across leading banks transitioning to commercial rollout and the significant and dedicated effort of an international team of developers and partners involved, we believe innovation of this scale requires aligned focus and determination by both industry and the technology innovators delivering the solutions.”
The company understands that the process of implementing the blockchain technology into practical working models, is as important as the effort invested in the ongoing innovation development of the technology. “We are excited to be at the forefront of this development and driving the commercialization of these critical emerging technologies,” said Giuseppe.