Microsoft has emerged as a leading force behind the rise of enterprise blockchain networks with a formative portfolio of new and forthcoming services in Azure. Learn how these cryptographically hashed distributed ledgers could change how transactions are processed.
At a recent event showcasing a variety of customers using Microsoft’s software and cloud services to transform traditional business processes, one could be forgiven for overlooking the modest booth staffed by Ann McCormick. While the Steelcase modern office environment and Hershey’s IoT-enabled analytics solution may have overshadowed her demonstration visually, McCormick described how one of the world’s largest banks has piloted Microsoft’s Blockchain as a Service (BaaS) on Azure to automate the letter-of-credit application process. McCormick, director of trade and supply chain finance at Bank of America Merrill Lynch, explained how using blockchain helped automate the now-cumbersome credit application and verification process.
The demonstration is the latest example of a growing number of large organizations trialing emerging networks and applications based on blockchain, the technology that powers peer-to-peer distributed digital-token-based transactions such as bitcoin. McCormick showed a business-to-business transaction between Microsoft’s Treasury services division, the bank and a prototypical customer referred to as Nerdy Handbags. McCormick said that the pilot validated the potential for blockchain to eventually replace the traditional, time-consuming and costly paper-based letter-of-credit application process that involves a number of third-party verification processes including SWIFT banking transactions. The use of Microsoft’s BaaS provided an alternatively secure, digitized credit application flow through the electronic interchange of documents and funds, McCormick explained. McCormick shares a rapidly growing view that as the technology matures over the next year or two, that blockchain networks can significantly simplify and reduce the cost associated with applying for credit in a business-to-business transaction involving more than two parties.