By Reuben Tucker, ANZ Head of Transaction Banking for New Zealand and the Pacific
While there's been a lot of hype around cryptocurrencies, it's the underlying blockchain technology that has the potential to solve real business problems, particularly here in New Zealand.
Blockchain is a secure and decentralised way of sharing data and transactions. This means that every event and every transaction is time-stamped and stored in digital 'blocks', which become part of a growing chain and a permanent record that cannot be altered or tampered with because it is accessible to all those who can access the ledger.
It's a revolutionary way to do business. With our innovative culture, good skills and businesses that know each other, New Zealand is an ideal petri-dish to develop blockchain technology. A recent panel of blockchain experts also agree.
"New Zealand has all the ingredients a country needs to develop blockchain technology inside its own borders," says Rupert Colchester, IBM New Zealand and Australia's Head of Blockchain.
The comments were made at a panel discussion into how blockchain technology can be applied to solve problems at the local-businesses level.
"The business ecosystems in both Australia and New Zealand are nicely 'packaged', making testing of new technologies like blockchain easier," says Mr Colchester. "A tight business community gives you a real advantage."
"The important step is now developing a strategic approach, which starts with looking at business problems and building an ecosystem of participants and beneficiaries around the solution to these problems."
The panel – part of an event hosted by ANZ and run for businesses in Auckland, Wellington and Christchurch – heard that in New Zealand, and indeed globally, there has been growing interest in cryptocurrency and its underlying technology, blockchain.
It's estimated that by the end of 2020 more than US$2.1 billion will be spent developing blockchain solutions and blockchain's market value will be US$3 trillion by 2024.
IDG Connect research shows approximately 13% of senior IT managers have plans to implement blockchain, illustrating the importance of ensuring management and boards understand the implications of this technology.
Two companies leading the innovation in New Zealand are New Zealand Post and Air New Zealand.
Earlier this year New Zealand Post announced it was working with Chinese e-commerce giant Alibaba to use blockchain to improve supply chain transparency and food safety assurances with partners Fonterra and Blackmores.
New Zealand Post Manager Strategy and Strategic Partnerships Dene Green says blockchain is an important tool in supply chain management. "Blockchain is a game changer as it provides trust and security across the supply chain."
"New Zealand's brand is so closely aligned to premium food products, so it makes sense to have greater visibility across the whole supply chain."
For instance, Hui Maori Collective, a group of 11 New Zealand companies, will soon launch on one of China's e-commerce platforms, Tmall Global, due to a partnership with New Zealand Post and AsureQuality. ANZ and Centrality are also involved in providing a blockchain solution for the quality assurance framework. Providing this trust to Chinese consumers will be a compelling point of difference for the Collective.
This type of technology could also become the catalyst for a profound change in the financing model for the production of food and its supply chain.