A former
Google engineer, whose speech recognition software is used in
more than a billion Android smartphones, has launched a company that
uses blockchain technology to build a new operating system for banks.
Paul
Taylor, a Cambridge University academic with an expertise in artificial
intelligence, speech synthesis and machine learning, started working on
the system, called Vault OS, two years ago in a basement in London's
district, known for being a tech start-up hub.
Blockchain
technology has captured the imagination of the financial industry, with
advocates saying it has the potential to shake up how markets operate.
The technology, which underpins the digital currency Bitcoin, creates a
shared database in which participants can trace every transaction ever
made.
The ledger is tamper-proof and transparent, meaning that
transactions can be processed without the need for third-party
verification.
"Most of the banks are using systems that were
written in the 80s and 90s, and they just are not ready for the
security-conscious internet app age at all," Taylor told Reuters. "What
the blockchain does is provide a very secure way of storing
transactions."
The system also negates the need for costly
in-house data centres, as it uses cloud-based systems, which banks can
use on a "pay-as-you-go" basis, which means that there is no single
point of failure.
Taylor said major high-street banks were
spending around a billion pounds ($1.3 billion) a year on computer
technology, much of which he said was being used for propping up the
current "legacy" systems rather than on any innovative technology.
Blockchain
is still a nascent technology and is reckoned to still be five to ten
years away from widespread adoption. Its reputation has suffered
somewhat from its association with bitcoin, which has seen several
company failures, including Tokyo-based exchange Mt. Gox filing for
bankruptcy and leaving investors approximately $500 million in the red.
The
startup has been working with about ten banks, Taylor said, at least
one of which would be starting a trial using the new system in August.
He expects the system to be up-and-running within about a year.
© Thomson Reuters 2016
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