How can blockchain improve economic security in developing countries? Mr. Shehzad Bhanji, keynote speaker and mentor of the RMIT Fintech Blockchain Competition 2022explains.
Mr. Shehzad Bhanji, a senior leader in global marketing, digital innovation and fintech with a career spanning more than two decades in Asia and Europe, spoke about the endless possibilities blockchain and fintech can offer to solve real-world problems.
He emphasized how blockchain can provide solutions to three economic security problems in developing countries, namely lack of access to banking facilities, lack of property ownership and rule of law issues.
“This would especially benefit people who have had to operate in the informal economy. They are often subject to services that come with increased costs or unreasonable conditions,” said Mr Bhanji.
Mr. Shehzad Bhanji, Keynote Speaker and Mentor of the RMIT Fintech Blockchain Competition 2022
Access to cheap banking facilities
One of fintech’s biggest contributions has been to financial inclusion. This includes making micro-loans, or payday loans, at a fraction of the cost of traditional loans offered by banks.
Mr Bhanji cited the example of a microcredit product launched in Indonesia by QNB Bank Indonesia, local telecommunications company Indosat Ooredoo Hutchison and China’s largest digital bank.
Combining their respective strengths, the partners created a platform that enables microloans to be delivered as quickly as three minutes.
Eligible borrowers are determined by their “digital profiles” – an alternative to credit scores that take into account the customers’ spending habits and their ability to actually repay the loans.
Insure property
According to Mr Bhanji, blockchain can be used to register ownership of property be it digital or non-digital. It will protect the owner’s rights from theft as blockchain is very secure.
“Blockchain is a distributed ledger technology. This means that if one block in one chain were changed, it would be immediately apparent that it had been tampered with,” he said.
“If hackers wanted to damage a blockchain system, they would have to change every block in the chain, across all distributed versions of the chain.”
Thanks to this advantage, using blockchain for real estate ownership registration will enable proper transfer of ownership after a sale, easily resolve disputes and prevent fraud.
Creating the rule of law
The informal economy feeds on a lack of rule of law, as Mr Bhanji explains: “Contracts are simply ignored, payments are delayed or flatly refused and disputes have to be resolved in court, which takes a lot of time and money.”
But smart contracts can help solve such problems.
A smart contract is a form of automated protocol that automatically executes the conditions specified in an agreement in a blockchain, once certain preset conditions are met.
“It will make it easier for organizations and citizens to obey the law and the agreements made, making it cheaper to play by the rules and reducing the informal economy,” Bhanji said.
Turning ideas into proposals
Currently on-going, the RMIT Fintech Blockchain Competition (RFBC) 2022 will provide students from high schools and universities in Vietnam with a platform to get creative with using fintech and blockchain to tackle issues like the above and more.
Building on the success of the inaugural competition last year, RFBC has returned with a new theme – “Powering a Sustainable World with Fintech and Blockchain”, based on the United Nations Sustainable Development Goals (SDGs).
The competition welcomes ideas that can support five selected SDGs: SDG 1 – No Poverty, SDG 2 – No Hunger, SDG 4 – Quality Education, SDG 8 – Decent Work and Economic Growth, and SDG 13 – Climate Action
RMIT University Finance Lecturer and Competition Coordinator Dr Devmali Perera said: “This is the second time we are hosting this competition and we have already received a significant number of team registrations so far.”
“This year’s competition fosters even more mutually beneficial relationships with the industry, and the prizes for the winners are also attractive. So I look forward to all the ideas and connections that will be forged.”
Read more about the competition on https://www.event.rmit.edu.vn/rfbc-2022-en†
