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DLT-based irrefutable trust

Estimated reading time: 9 minutes

Enterprise IT News has a chat with Amit Ghosh, Chief Information & Services Officer for R3

EITN: What is R3? What are its main products and target markets?

Amit: R3 is a leading provider of enterprise technology and services that enable direct, digital collaboration in regulated industries—banking, capital markets, global trade and insurance—where trust is critical.

Multi-party solutions developed on R3’s platforms harness the “Power of 3”—R3’s trust technology, connected networks and regulated markets expertise—to drive market innovation and improve processes.

With over 400 institutions using our DLT production ecosystem for multi-party collaboration, our customers and partners have access to global systems integrators, cloud providers, technology firms, software vendors, corporates, regulators, and financial institutions from the public and private sectors.

R3’s platforms, Corda and Conclave, are purpose-built to deliver irrefutable trust between multiple parties.

Corda, is purpose-built, scalable DLT platform that enables businesses to transact directly and in strict privacy using smart contracts, reducing transaction and record-keeping costs and streamlining business operations. In a world where data is shared with all parties, Corda’s strict privacy model allows businesses to transact securely and seamlessly.

As an end-to-end platform, applications underpinned by Corda solve real-world problems in the near-term and are scalable enough to enable app builders to explore new markets and revenue opportunities.

In addition to Corda, R3 also offers Conclave, a confidential computing platform. As businesses strive to keep up with digitisation and the security threats that come with it, confidential computing will become increasingly important. With priorities such as efficiency, security, and privacy coming to the fore, Conclave designed to meet these needs, ensuring that data is kept secure while allowing businesses to achieve data-driven business outcomes.

R3 has a presence all throughout APAC with focus on five key markets – Singapore, Australia, Hong Kong, Thailand and India. The company also has some of the most extensive use cases in the industry with a robust portfolio across APAC.

EITN: What is Conclave, a confidential computing platform, and what does it do?

Amit: Conclave is R3’s newest service offering that launched in February 2021, after rounds of Beta testing done by R3. It is a confidential computing platform that secures sensitive business data while it’s being used. Simply put, firms are able to securely aggregate their datasets to solve shared business problems for their customers and across markets, without revealing the actual data to anyone.

In confidential computing, data is encrypted in a Trusted Execution Environment (TEE), also known as an enclave that is separate from the rest of the computer. TEEs ensure that data can be processed without the user gaining access to raw data. As a result, This creates a tamperproof service, where enclaves will have a specific algorithm that users are unable to modify—this means that users are unable to make the enclave do what it was not coded to do. Conclave leverages Intel Software Guard Extensions (Intel SGX), to create a hardware-based secure enclave residing in a CPU, which enables the key functionalities of the TEE described above.

Traditionally, data is only encrypted at rest and in transit, but Conclave also protects it while

In sum, Conclave solves critical business challenges where data needs to be shared, but without any one person or firm seeing another’s information. For example, a bank that operates an electronic market, but wants to assure its customers that it does not see their data; or an insurer that needs to share information about fraudulent claims without breaching confidentiality rules.

Traditionally, data is only encrypted at rest and in transit, but Conclave also protects it while it is being processed. Apart from enabling organisations to enjoy tamper-resistant applications—bringing greater data transparency, security, and ownership for business, confidential computing can also facilitate greater collaboration across firms, ultimately paving the way for innovation and growth of various sectors, and can also detect fraud, drive down costs, and allow firms to build high-value multi-party analytics.

EITN: What are the top 3 use cases that the Fund has helped to support to commercial success?

Amit: R3 Development Fund (RDF) is an active value-add investor across all its portfolio companies which is now nearing 30 startups across the globe spanning different industries. The portfolio has concentrations in the earliest sectors where enterprise DLT is finding adoption — namely,  capital markets, trade finance, and Insurance. As a platform fund, RDF takes an “under-the-radar” approach and consequently we do not disclose our investment positions.

The RDF team, however, works closely within R3, with teams from Sales to Engineering and Legal, to support each portfolio company. The RDF team works with entrepreneurs to address challenges around product build, fundraising, and business development. Examples include (i) connecting startups to potential customers through introductions to the broader R3 network; (ii) connecting the startups to other potential technical or business development partners to accelerate their product build or go-to-market strategy; (iii) supporting the startups while they are undergoing technical or business diligence from a potential customer or an investor; and (iv) introductions to potential investors through the RDF’s extensive contacts in the Corda and broader DLT ecosystems.

RDF primarily works on supporting the portfolio companies, but we also have a rigorous Venture Development program that works with a broader startup ecosystem irrespective of our investment and their stage. Through financial and human capital investments in its ecosystem, R3 provides as much support as possible to grow CorDapps and drive their adoption in their respective markets.

EITN: Can you share the top ways that regulation has adapted to enable proliferation of blockchain technology in financial institutions?

Amit: A prime example in APAC, would be Australia. Australia’s National Blockchain Roadmap was published in February 2020 and was focused on private and permissioned blockchains, limiting the potential for permissionless blockchains and their related use cases. When it was first published, the financial application of blockchain was also an area that was not covered in great detail by the roadmap. This was most likely due to the nascent status of blockchain as a technology with its limited use cases at the time.

A combination of funding from the Federal Government and industry partners amounting to AU$181 million has been channeled to support a 10 year research program on the digitisation of assets.

However, this has all changed in a matter of months, with the Australian government taking the lead in exploring the use of blockchain in the financial sector. A combination of funding from the Federal Government and industry partners amounting to AU$181 million has been channeled to support a 10 year research program on the digitisation of assets. Such regulatory developments bode well for blockchain as it clears the way for greater experimentation of the technology in financial institutions in Australia, specific to the digitisation of assets.

EITN: How do you support your customers’ go-to-market strategies?

Amit: R3 commits to the success of our customers and with a dedicated professional services team that offers a suite of advisory and engineering services to help businesses accelerate the design, development, and deployment of blockchain solutions on the Corda.

Customers have access to support from the R3 team on the roll out of their CorDapps—from product design, to GTM strategy and deployment. An example of a framework put in place by R3 would be to enable customers to set up a test network, and run market simulations to acquire early adopters. This GTM trial anables partners to run a multi-institution, global market simulation with R3’s extensive ecosystem, and leverage the R3 sales team to drive trial adoption. Through this process, firms can also gain end-user feedback to improve the solution and deployment.

Partners can also tap on R3’s Engineers-as-a-service, building upon their internal teams to accelerate time to production.

SIX Digital Exchange (SDX), a new digital asset exchange, is one beneficiary of this program. R3 has provided developers, architects and consultants to work alongside SDX, coding together. This enabled the exchange to bring the first prototype of the SDX solution to market in just a few months.

EITN: Is there a platform that is enabling your customers to have access to a network of leading systems integrators, cloud providers, technology firms, software vendors, corporates, and banks? How does that work?

Amit: R3 leads and maintains one of the world’s largest DLT production ecosystems, with a network of institutions including systems integrators, cloud providers, technology firms, software vendors, corporates, regulators and financial institutions. Customers can gain access to a range of firms that offer compatible technology solutions and services with the Partner Connect Program. This enables firms to tap into the expertise of partners to better build solutions on Corda.

R3 leads and maintains one of the world’s largest DLT production ecosystems, with a network of institutions including systems integrators, cloud providers, technology firms, software vendors, corporates, regulators and financial institutions.

Customers can also join R3’s Venture Development program, which aims to support budding developers and early stage startups with the right tools and support to accelerate their GTM strategy. Members of the program will have access to R3’s ecosystem of experts, mentors and investors, through workshops, educational content that supplement their journey for growth

EITN: Please share your future roadmap. Do you have a project which is working upon solving privacy and transparency issues in technology usage?

Amit: Given R3’s launch of Conclave earlier this year, the company’s focus will be on evangelizing confidential computing and Conclave’s use case across various industries. R3 will continue to establish partnerships and collaborate with firms to deploy Conclave in areas such as fraud and financial crime detection, to aggregate market data in a safe and confidential manner, and for private order matching and more robust data analytics.

Apart from a focus on Conclave, R3 has also recently launched the R3 Sandbox for Digital Currencies, a learning and development platform for CBDC experimentation. R3 has also partnered with the ASEAN Financial Innovation Network to encourage more central banks, commercial banks, and fintechs to collaborate with one another in a ‘ready-made payments ecosystem’, and evaluate CBDC use cases, learn, transact, and test roll-out strategies and designs. As the CBDC race continues to heat up around the world, one can expect to see CBDC being a focus vertical for the firm.

R3 has also partnered with the ASEAN Financial Innovation Network to encourage more central banks, commercial banks, and fintechs to collaborate with one another in a ‘ready-made payments ecosystem’.

To address your question, Conclave will aim to solve the privacy and transparency issues in technology usage. Companies have traditionally looked to the cloud, to store troves of data, however, this has opened up the possibility for data breaches and hacks. First, storing data on remote servers on the internet leaves room for third party users and bad actors to gain access to datasets through an internet connection.

The lack of visibility of cloud security is also a prevalent issue, with organisations unable to identify anomalous activity and take steps to address that. This as a result increases the risk of data being tampered with by unauthorised users. Confidential computing has the potential to bring greater transparency, and privacy to the way data is collated and processed.

EITN: In your opinion, is there more awareness/education needed about blockchain, and its potential?

Amit: Definitely. Although many members of the business community are increasingly open to the concept of emerging technologies, some still do not fully understand the technology that undergird blockchain and how it fits into their broader digital transformation strategies. Others might adopt a wait and see approach given the lack of use cases demonstrating how blockchain is being used at scale.

I believe that education and advocacy have been, and shall continue to be, a cornerstone of blockchain adoption efforts. It is encouraging to see efforts being put in place at a regional level — case in point: Asean Blockchain Consortium which came into force in April 2021 — to drive blockchain education, and promote the adoption of the technology in Southeast Asia and Australia.