24 September 2017
visit www.avoka.com

Industry-wide blockchain breakthroughs at least six years away

12 October 2016  |  18346 views  |  1 Group of arrows with one odd pointing other direction

While three quarters of banks are actively experimenting with blockchain technology, regulatory uncertainty and a lack of inhouse expertise are proving major roadblocks to near-term adoption, according to research from SIX Securities Services.

Despite the excitement about the potential for distributed ledgers and smart contracts to fundamentally alter the financial landscape, respondents to the SIX Securities poll are not anticipating any immediate breakthroughs, providing an average estimate of six years before blockchain is widely implemented.

The study reveals different approaches to innovation. Thirty-two percent have developed a proof of concept, while 1 in 5 (18%) are piloting a specific product or service. Fourteen percent of total respondents say they have set up a blockchain focused innovation lab, while 12% have partnered with a blockchain company.

SIX is itself a prime exemplar of this trend, having contracted with Digital Asset Holdings to develop a proof of concept to test the commercial viability of distributed ledger technology across the Swiss financial market, with an initial focus on securities lifecycle processing. The firm could also be seen at the Swift financial conference Sibos showcasing a protoytpe application for corporate actions.

The SIX poll found one-third of financial institutions believe that blockchain will have the biggest impact on settlement (38%), followed by clearing (34%). However, just 20% agree that the technology will make the clearing process completely redundant.

Thomas Zeeb, CEO of SIX Securities Services comments: “A lot of the conversations we are seeing around blockchain are on the technical level, looking at what is feasible with blockchain rather than what is desirable from a business standpoint. Blockchain has the potential to make a number of business models and intermediaries obsolete, which isn’t necessarily a bad thing. It is however important to question the changes that this would bring to the ecosystem."

Regulation emerges as the primary perceived barrier, particularly for global systemically important banks - 72% highlight this as one of the top three factors holding blockchain back from being adopted in clearing and settlement today. Conservatism and inbred caution in the C-suite must also be overcome.

Setting up a blockchain lab is one thing, garnering top-level support for a commercial roll-out is another, says Zerb.

"Until the industry has clear indications on sustainable use cases - including costs and benefits - it will be difficult to convince top managers to bring their trusted systems into these new domains,” he says.

Comments: (1)

Rune Berggren
Rune Berggren - SopraSteria - Oslo | 13 October, 2016, 13:01

6 years away? According to IBM's new Blockchain Study 'Leading the pack in Blochchain banking'- Blockchain will be used by 15% of Big banks by 2017

 

 

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Blockchain-based smart contracts to save FS customers billions - Capgemini

Blockchain-based smart contracts to save FS customers billions - Capgemini

11 October 2016  |  12893 views  |  0 comments | 19 tweets | 15 linkedin
Luxembourg fund industry coalesces around blockchain

Luxembourg fund industry coalesces around blockchain

07 October 2016  |  12886 views  |  0 comments | 20 tweets | 21 linkedin
Sydney Stock Exchange completes first phase of blockchain-based settlement project

Sydney Stock Exchange completes first phase of blockchain-based settlement project

06 October 2016  |  9610 views  |  0 comments | 8 tweets | 9 linkedin
Banks ready for real-world blockchain

Banks ready for real-world blockchain

29 September 2016  |  13329 views  |  0 comments | 28 tweets | 33 linkedin
CSDs look to harness distributed ledger technology

CSDs look to harness distributed ledger technology

27 September 2016  |  4788 views  |  0 comments | 1 tweets | 8 linkedin
BNP Paribas is working with clients on blockchain deployment

BNP Paribas is working with clients on blockchain deployment

26 September 2016  |  18522 views  |  0 comments | 19 tweets | 40 linkedin
SIX and Clearstream team up as post-trade consolidation pressure grows

SIX and Clearstream team up as post-trade consolidation pressure grows

23 September 2016  |  5422 views  |  0 comments | 1 tweets | 1 linkedin
SIX hires  Digital Asset for post-trade DLT; Swift bids for standards role

SIX hires Digital Asset for post-trade DLT; Swift bids for standards role

22 September 2016  |  7968 views  |  0 comments | 3 tweets | 6 linkedin
Time has come to extract value from blockchain investment – new Finextra paper

Time has come to extract value from blockchain investment – new Finextra paper

20 September 2016  |  9690 views  |  0 comments | 24 tweets | 16 linkedin
Exchange body calls for creation of regulatory sandboxes for distributed ledgers

Exchange body calls for creation of regulatory sandboxes for distributed ledgers

05 September 2016  |  7703 views  |  0 comments | 23 tweets | 14 linkedin
Transaction confidentiality tops blockchain security concern for banks

Transaction confidentiality tops blockchain security concern for banks

17 August 2016  |  7955 views  |  0 comments | 14 tweets | 12 linkedin
Blockchain to become 'beating heart' of financial system

Blockchain to become 'beating heart' of financial system

12 August 2016  |  23218 views  |  0 comments | 53 tweets | 74 linkedin
Bitcoin and blockchain pose little risk to payments giants - Credit Suisse

Bitcoin and blockchain pose little risk to payments giants - Credit Suisse

05 August 2016  |  16837 views  |  0 comments | 23 tweets | 28 linkedin
Inadequate response to blockchain threat leaves banks exposed says Bain

Inadequate response to blockchain threat leaves banks exposed says Bain

15 July 2016  |  13187 views  |  0 comments | 26 tweets | 16 linkedin
R3 outlines Corda distributed ledger for financial agreements

R3 outlines Corda distributed ledger for financial agreements

05 April 2016  |  9152 views  |  0 comments | 7 tweets | 9 linkedin

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.capgemini.comvisit www.sibos.comdownload the paper now

Top topics

Most viewed Most shared
HSBC switches on selfie payments in ChinaHSBC switches on selfie payments in China
13316 views comments | 28 tweets | 44 linkedin
AXA launches blockchain to cover late flight compensationAXA launches blockchain to cover late flig...
9574 views comments | 13 tweets | 28 linkedin
Apple P2P payments service nears launchApple P2P payments service nears launch
8566 views comments | 19 tweets | 27 linkedin
SBI Ripple Asia advances on South KoreaSBI Ripple Asia advances on South Korea
8269 views comments | 16 tweets | 1 linkedin
European Commission makes fintech a priority in supervisory shakeupEuropean Commission makes fintech a priori...
8037 views comments | 32 tweets | 45 linkedin

Featured job

Competitive base, double ote, benefits
London, UK

Find your next job