Alior announced the introduction of a so-called digital durable medium based on the use of the public blockchain Ethereum. The bank claims that this is the first time such a solution is being implemented in Poland. From now on, you can use Ethereum to verify the authenticity of Alior documents, including fees and commissions lists as well as service terms and regulations. The bank's press release states that in order to check the authenticity of such documents, the user needs to simply connect to the internet and verify it using a dedicated browser.
Why do they need a durable medium? The Polish Office of Competition and Consumer Protection (UOKiK) requires banks who want to send digital documents to their customers to follow several rules. They need to guarantee the unchangeability of the documents over time and make sure customers have access to them even after the contract between them and the bank is no longer in force. Most companies in Poland decided to use the WORM solution (a type of server that does not allow for a file to be changed after it’s been uploaded). Several others, including PKO and BNP Paribas, implemented a solution that uses private blockchain, developed in cooperation with KIR. Alior is the first to use a public network.
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Tomasz Sienicki, Alior’s blockchain technology strategy manager, points out that the solution introduced by the bank was approved by UOKiK. - The office stated that it will give us an ex-post evaluation of whether the solution is compliant with its requirements. But we are expecting a positive result - he said.
According to Sienicki, their public blockchain solution is better than PKO or BNP Paribas’s private blockchain ones. - Those banks, together with a secure third party - KIR - control the information stored in the blockchain. The customer also has no way of independently verifying whether the information stored in it is in fact identical to the initial content of the document - he said.
The solution proposed by Alior is supposed to eliminate that problem. The source code which guarantees the unchangeability of the document is publicly available. - This means that if the customer has the appropriate skills, they can make sure that the bank isn’t changing anything. Besides, a public blockchain has thousands of nodes (servers), which makes manipulation practically impossible and financially unviable - said Sienicki.
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Unfortunately, Alior’s durable medium solution also has its disadvantages. It can only be used to secure public documents, such as the fee lists and regulations mentioned above. Private documents, such as contracts with account or card users, cannot be placed in it because of personal data protection laws and the so-called right to be forgotten.
However, Alior hopes that in the future, blockchain can be used for other banking processes. - We are researching the use of blockchain in other finance areas. We’re looking into solutions for supporting retail financing or information compliance verification for money transfer processing - said Krzysztof Bachta, Alior CEO.
