Similar to many other technologies, while the repercussions of the COVID-19 pandemic have pressured an uptick in the use of enterprise blockchain, according to Wong, the pandemic has merely accelerated a trend that was already progressing. In addition to the banking and finance sector, Hong Kong real estate developers have been exploring the use of enterprise blockchain as a way to streamline workflows and increase efficiencies. With real estate development projects involving main contractors, architects, surveyors and numerous sub-contractors, enterprise blockchain provides a secure and authenticated means to exchange documents, workflow schedules and payment settlements between multiple stakeholders.
Additionally, property sale and purchase transactions involve multiple complex steps with buyers, real estate developers, banks and law firms all working separately. Enterprise blockchain solutions can be used as a one-stop platform to streamline the provisional sales and purchases agreement and title deeds document distribution between all stakeholders. "It is not simply a case of sharing documents, it is a secure way of sharing authenticated documents using digital signatures," Wong explains. The buyer needs their identity verified for all parties involved. Instead of doing this for each individual party, using blockchain the purchaser can provide their data once and then authorise access to their encrypted data. Offering further value, enterprise blockchain documents allow AI to be used to retrieve and analyse useful information stakeholders can use to improve process and make informed decisions. For example, solutions to manage risks in real estate development through better transparency, identification, or measurement of risks, along with effective mitigation strategies.
While a notable upside of enterprise blockchain is streamlining the sharing of information between parties and doing away with paperwork, the technology can also provide important community benefits. For instance, building with the Hong Kong Federation of Insurers (HKFI), CryptoBLK's Motor Insurance DLT-based Authentication System (MIDAS) addresses a number of pain-points. The underlying blockchain technology offers a real-time authentication of motor insurance cover notes and policies, as well as multi-stakeholder verification and audit trails. Vehicle owners, for example, can use a system-generated QR code to have their insurance cover notes and policies authenticated at the Transport Department’s Licensing Offices in real-time. MIDAS can also protect car owners from being issued with fake motor policy documents and speed up the authenticity checking process for law enforcement bodies. MIDAS is not only the first industry-wide application of blockchain technology in the motor insurance space in Hong Kong; it is the first in Asia. Importantly, although the system currently addresses car insurance, the technology can be scaled or adapted to cover other forms of insurance products.
Expanding Hong Kong's blockchain footprint
As a catalyst for applying blockchain technology to create an array of new financial products and solutions to tap into Asia-Pacific markets—especially those in the Association of Southeast Asian Nations (ASEAN)—Wong stresses that it is vital that Hong Kong tech companies have a thorough understanding of the challenges and nuances of each individual market. "While the demand for products and technologies are roughly similar, the need to have teams that include local people who are familiar with each market and the way it operates cannot be underestimated," advises Wong. For example, in Malaysia and Indonesia where CryptoBLK is involved with various projects, the firm employs local people to conduct business while the core teams in Hong Kong develop the products. The expansion plan for CryptoBLK, Wong explains, is to become a big player in a niche market in preference to becoming a small player in a big market.
Enhancing Hong Kong's competitive edge
Looking at the broader picture of Hong Kong as a global frontrunner or leader in FinTech development, Wong notes how the city has "natural advantages" it can leverage. For example, the Hong Kong brand name for developing high-quality technology deliverables backed by a high standard of professional services. Building on these established foundations, the Hong Kong Monetary Authority (HKMA) recently launched "Fintech 2025", a new strategy for driving FinTech development in Hong Kong, which includes encouraging Hong Kong banks to utilise FinTech and fully digitalise their operations. The HKMA also plans to play a leading role in enhancing the city’s existing data infrastructure and building new ones, including commercial data interchange, digital corporate identity, and DLT-based credit data sharing platform, to facilitate consent-based data sharing.