Jack Ma’s fintech giant Ant Financial is planning to increase its emphasis, and use, of blockchain technology in an effort to provide more trustworthy data to its user base, according to a report in the South China Morning Post.
The article cited a keynote address at Hong Kong’s Internet Economy Summit by Ant Financial CTO Cheng Li, who said the goal was to make Ant’s business more comprehensive.
One of the initiatives Li highlighted is to expand its big data for charities service called Ant Love. The programme uses blockchain to help organisations track donor history. So, when someone makes a donation to charity using Alipay, their information is stored via the blockchain which can then be accessed by authorised employees.
Li said Ant Financial plans to expand the Ant Love programme starting this month, according to the SCMP.
This news comes on the heels of an announcement from Alibaba a few weeks ago that it would employ blockchain to help fight food fraud in China.
Blockchain as a fraud-prevention tool
While the distributed ledger technology is most famous for being the backbone of cryptocurrencies like bitcoin, recently more ‘traditional’ organisations have begun to leverage blockchain to prevent fraud.
As mentioned above, Alibaba is using it to ensure it is sending real food, but Chinese banks are using the technology to fight fraud and even older financial services companies like Fidelity are exploring its potential.
At the end of 2015, NASDAQ made a share-trade using blockchain, calling it a “seminal moment”.
The reason blockchain is so useful for fraud prevention is because of the transparency required to complete transactions.
Every deal is logged in the distributed ledger as an stand-alone transaction. Assuming both parties are verified (say, merchants using Alibaba to sell food), they would need to independently verify themselves just to complete the sale.
Finally, the transaction would be marked in the encrypted ‘block’ which presumably Alibaba could access when it wanted to verify the parties.
The same idea can be transferred to the financial industry which is why companies like Ant Financial are exploring its feasibility for a larger audience.