From CoinJournal. Story by Diana Ngo.

Large South African companies and banks are beginning to experiment with blockchain technology as a way to streamline processes, saving time and money.

“In 2015, we saw all the big banks in South Africa starting to engage on blockchain and what we foresee for 2016 is an aggressive move to investment in blockchain applications,” Dominique Collett, Rand Merchant Investments senior investment executive, told ITWeb.

“Blockchain is beginning to become more mainstream and people are recognizing that it is a massively powerful and transformative technology for the financial services industry,” Collett said. “If we can move it into a regulated space, it is going to increase financial services access and efficiency, particularly for a continent like Africa.”

All South Africa’s leading financial institutions have some proof-of-concept or early stage technology related to the blockchain, according to Ross A. Mauri, general manager at IBM’s z Systems.

Blockchain has the potential to transform the way business is done by allowing decentralization, disintermediation and greater efficiency. “Instead of requiring a central unit to verify payments and contracts, blockchain technology uses an open source ledger framework to establish agreements between parties, reducing steps and delays in validation,” Mauri said.

IBM is part of the Hyperledger Project, a collaborative effort to create a cross-industry open standard for distributed ledgers. Alongside IBM, JP Morgan, Accenture, CME Group, DTCC, and Intel, are also involved in the project.

Most organizations in South Africa are actively investigating the potential of the technology, said Lorien Gamaroff, the founder and CEO of Bankymoon. A software company focusing on blockchain technology, Bankymoon helps companies integrate distributed ledgers into their businesses.

“There is not just a single category of business that can make use of the technology,” Gamaroff said. “In the same way that the Internet benefited all industries, so will blockchain … Banks are particularly interested in incorporating blockchains to lower costs and speed up processes.”

Virtual currencies and blockchains are the “Internet of the next generation,” Gamaroff said, adding that the most important advantage is that nobody can manipulate or corrupt information in a blockchain.

“This means that data can be trusted absolutely. Digital currencies, like Bitcoin, can be sent to anyone in the world almost instantly and at a very low cost. Billions of dollars are spent each year in fees by people remitting money around the world.

“These fees can be eliminated by using Bitcoin. Bitcoin can serve the billions of people around the world who do not have access to banking services. Other assets can be transferred without requiring a trusted third-party to manage the transfer. This also means a reduction in time and costs.”

Technological innovations in the digital and mobile areas boosted inclusive growth in developing African markets over the past few years. The success of mobile payments solution M-Pesa is an example of the mobile revolution in the continent.

“We are now moving into the second wave of digital innovation with regards to inclusive growth, and this wave is being driven by five key megatrends,” said Wim Van Der Beek, managing partner at Goodwell Investments, in a Ventures Africa interview.

Read more at CoinJournal.