At PegaWorld 18, Pegasystems has launched the Pega Blockchain Innovation Kit. It is available for download by customers who are interested in building their own blockchain enabled applications. As organisations increase their interest in blockchain-based applications, this is Pegasystems getting ahead of the competition.
The Pega Blockchain Innovation Kit is built on the Ethereum blockchain. Pegasystems has shipped it with a proof of concept (POC) template for banks. This allows them to test how Pega Know Your Customer (KYC) and Pega Client Lifecycle Management (CLM) can work with blockchain.
Alan Trefler, founder and CEO, Pegasystems said: “As the breathless hype around blockchain continues to escalate, many organizations are jumping on the bandwagon without first knowing what real business problems they want it to help solve.
“Pega has decades of leadership in digital process automation, putting us in a prime position to identify the best enterprise use cases for blockchain that will drive real results. Our blockchain innovation kit will help our clients explore blockchain as a new piece to their digital strategy, as well as understand the critical role Pega can play in unlocking its value.”
Pegasystems targeting KYC and CLM
Trefler’s statement will appeal to many in IT departments. They are currently besieged by customers and vendors telling them that the future is blockchain. It certainly has a place for some types of solutions as Enterprise Times has regularly pointed out. The challenge is deciding what applications and how best to deploy it.
There are two applications that Pegasystems does believe that blockchain can deliver upon, KYC and CLM for banks. Billions of dollars worldwide are invested into systems to ensure banks meet their compliance obligations in both areas. Blockchain will make it easier for banks to securely record the data used by KYC and CLM.
While that makes this a valuable solution for a bank, the challenge will be in how banks share information between blockchains. It is unlikely that banks are going to create one master blockchain even across a single large group. Financial regulations put strict controls on how customer data is shared both internally and externally. This means that Pegasystems will need to show that it has thought through the challenge of interledger communications.
Banks are also opening their data and systems to new partners. Open Banking in the UK is supposed to make it easier for banking data to be shared. Blockchain could turn out to be a useful part of the solution here.
Pega Blockchain supporting smart contracts and digital process automation
The Pega Blockchain Innovation Kit also comes with a predefined Smart Contract. This will govern how bank clients can read/write to the blockchain. It will also provide banks with an opportunity to explore the potential for other smart contracts.
For example, banking is an industry where terms and conditions are often onerous and subject to change, seemingly at the will of the bank. Using blockchain inside lending systems would provide a more trusted contract base. It will be interesting to see if Pegasystems begins to add sample smart contract clauses to help banks develop this type of solution.
Pegasystems is also keen to combine the Pega Blockchain Innovation Kit with its digital process automation (DPA) solutions. Within trade finance and supply chain, blockchain-based DPA is already beginning to move into production. However, where this is happening, the blockchain is not being managed by the bank but by the customer. For this to be a bank-led process, there will need to be work done at the interledger level.
What does this mean
Vendors are pushing blockchain hard. The problem is that many are suggesting blockchain as a solution where existing technology can already solve the problem. This is creating a problem as the blockchain silver bullet hype continues to grow. At some point there will need to be a resetting of expectation which will lead to a lot of abandoned projects.
What is interesting here is that Pegasystems is not just talking blockchain, it is enabling blockchain. By creating the Pega Blockchain Innovation Kit with templates, integrations and smart contracts, it is giving customers a platform on which to build.