From banks to blockchain: what happens now?

By Marieke Saeij, CTO, Onguard.

Monday, 3rd September 2018 Posted 6 years ago in by Phil Alsop

Blockchain, despite hearing the name in almost every sector, it seems that there is a widespread confusion over what the technology actually is and what it can do. For the most part, we have all at least heard of it, with a further small amount of people armed with an understanding of Blockchain in its most basic form. However, beyond this, there are still many questions, especially within the finance sector. Is it safe to move over to this new technology or does it really pose a security risk?

At this stage, and in this cloud of confusion, it’s impressive that very few are ignoring Blockchain. Our own research evidences this as we’ve found 87% of CFO’s are currently looking into Blockchain technology. However, another 36% of CFO’s have admitted that they do not understand enough about it to act just yet.

For the larger banks and financial institutions, Blockchain is painted as a risk rather than a potential opportunity. This is purely buoyed by the fear that the arrival of this new technology will render banks obsolete in the facilitation of secure document transfers. Instead, they will be left looking for new revenue streams to offset this loss of income.

In spite of this, there is evidence that some of the larger banks are collaborating on Blockchain applications, this is because of how closely tied Blockchain is to various cryptocurrencies. However, on the whole, the development of Blockchain is very much a watch and wait to see what happens. Just like the CFOs in our survey and these financial institutions, here at Onguard we are rolling out our own investigations, monitoring developments and watching to see how Blockchain can help businesses in the field of credit management.

Even though the whole issue seems very much uncertain, we are confident that Blockchain will be a very important development – one we have been following in relation to Bitcoin, smart contracts and predictive analysis. We are also investigating in terms of efficiency benefits, such as fewer errors and reduced administration costs. The potential for removing the transactional element of a deal in favour of a simple exchange across distributed general ledgers has great promise.

The consensus is that there are still several known obstacles to overcome, and possibly more unknown issues, before the Blockchain vision becomes a reality. Service and solution providers will need to play their part in the future of this disruptive technology with special attention when taking the time to explain the technology in detail and in helping to reassure customers about issues around security or regulation.

It’s not just a case of nobody quite knowing how Blockchain will impact the market. It’s also an extremely complex technology, with many definitions floating around the industry so t’s no wonder that 62% of businesses we polled currently have open vacancies for Blockchain experts.

For those interested, we would advise to speak to the experts, those that have been observing and researching Blockchain before making any changes to your current infrastructure. Blockchain will happen and it will bring benefits, but those businesses that are properly prepared and willing to make changes will reap most of the rewards.