Speakers at a roundtable suggested Sunday that the country's banks get prepared to adopt 'blockchain' technology in the coming days to provide more secure, swift and cost-effective financial services.
They also laid stress on capacity building of tech-savvy young professionals through installing digital innovation labs, which can benefit banks at the early age of blockchain technology (BCT) in the country.
The suggestions came at the roundtable titled 'Relevance of Blockchain for Banks in Bangladesh,' organised by Bangladesh Institute of Bank Management (BIBM) at its office in the city's Mirpur.
Blockchain is a data structure that makes it possible to create a digital ledger of transactions and share it amongst a distributed network of computers.
It uses cryptography to allow each participant on the network to manipulate the ledger in a secure way without the need for a central authority.
Cryptography is a method of protecting information and communications through the use of codes so that only those for whom the information is intended can read and process it, according to TechTarget, a US-based data-driven marketing service provider.
BIBM executive committee chairman and Bangladesh Bank (BB) deputy governor SM Moniruzzaman addressed the programme as the chief guest.
Dr Muzaffer Ahmad chair professor of BIBM Barkat-e-Khuda, BIBM associate professor Md Mahbubur Rahman Alam, United Nations Capital Development Fund (UNCDF) country project coordinator Md Ashraful Alam and BRAC Bank's chief digital officer Shyamol Baran Das also spoke at the roundtable.
Citing a study conducted on eight of the top 10 largest investment banks by Accenture, Mr Alam, in his keynote paper, said the adaptation of such technology could help reduce the cost of infrastructure to support the sampled banks operations by around 30 per cent.
Apart from saving costs, this technology will benefit the global banking giants in the areas of regulatory compliance, financial reporting and KYC (know your client) activities.
Another study by Business Insider Intelligence showed that the most common reasons that financial services firms in Europe, the Middle East and Africa region are investing in blockchain to create new business models or launch start-ups, Mr Alam added.
Talking about other benefits of the technology, he said blockchain will prevent financial fraud, save cost of forex volatility and delayed transaction settlements.
UNCDF country project coordinator said blockchain would be applicable to the areas where there is lack of trust and such automation in the financial sector will bring further transparency in their activities.
Terming blockchain a complex system, the UN official said the banks need to understand and execute the technology first in the house then should go for regulatory support from the government.
He suggested setting up digital innovation labs to create capable IT professionals and collaborating with global fintech companies to learn about the latest technology.
He noted several local start-ups have been working on the blockchain technology and the country's banks can start working with them initially.
BIBM director Dr Prashanta Kumar Banerjee, Supernumerary Professors Yasin Ali and Helal Ahmed Chowdhury and BB executive director Abdur Rahim delivered their speech at the programme.
ahb_mcj2009@yahoo.com