Could Blockchains and FinTech help HR?


Could Blockchains and FinTech help HR?

Blockchains are a financial technology. Right? Well almost. It certainly started there but the ideas that it brings are now being looked at by wider audiences. How can HR technology utilise this exciting development?

The Blockchain concept was conceived by an anonymous person(s) in 2008, under the pseudonym Satoshi Nakamoto. The white paper discussed the notion of a peer to peer version of electronic cash to be sent directly from one party to another without going through a financial institution/third party. This electronic payment system would be based on cryptographic proof instead of trust. Typically, the secure identity of each party provided by the financial institutions in this regime would be negated.

A Blockchain—the technology underlying bitcoin and other cryptocurrencies—is a shared digital ledger, or a continually updated list of all transactions. This decentralized ledger keeps a record of each transaction that occurs across a fully distributed or peer-to-peer network, either public or private. A Blockchain’s integrity hinges on strong cryptography that validates and chains together blocks of transactions, making it nearly impossible to tamper with any individual transaction record without being detected. The records cannot be amended as each block is tied into the previous one so this makes the records immutable.

It was thought that this would bring together the 2.5 billion “unbanked” people around the world who don’t have access to financial services but do have smartphones, enabling them to transfer money at a much lower cost. But, because the Blockchain can be used for any asset rather than just money this could prove useful for HR in extending the existing talent pool and improving processes.

HR departments are usually responsible for the onerous checking that their employees have the right to work in this country (wherever this country is), that passports, visas, permits, driving licences and so on are up-to-date and valid. Today’s copies of these are in multiple databases held by different parties such as previous employers, government agencies, bank, doctor etc.

In May this year, it was revealed that Yahoo CEO Scott Thompson did not have the degree in Computer Science he claimed in his corporate bio. It cost him his job. But he’s not alone, it is thought that up to 70% of people lie or, at least, exaggerate their experience and qualifications.

What if all these could be held in a central trusted Blockchain database of 100% verified immutable data? Think how useful this could be for candidate verification of experience, qualifications etc.? How much easier and more accurate it would be for HR Administrators?

The ideas keep coming. Keeping track of courses and events you have been to over your entire career would mean not having to fill out numerous online applications with the same data. Because the data is immutable you can safely assume that it is 100% correct, eliminating a lot of checks that previously had to be run through third parties.

Blockchain is still an emerging technology but it is being broadcast as the second next biggest innovation over other technologies like IoT (Internet of Things) and AI (artificial intelligence) etc. There are reminders of the early days of the internet, back in 1995, with many institutions teaming up large scale projects to define the solution. There are a number of large projects led by large financial institutions, and China, particularly, is heavily involved in this emerging technology

This will take some time and we may not see anything for another 5 years but, watch this space, the future looks bright.