Blockchain and Crypto

The state of blockchain in banking and finance

  • Industry leaders from banking, venture capitalist and startup perspectives offered their perspectives on the state of blockchain in banking and finance.
  • The implementation of blockchain-based solutions will depend on how quickly and easily governance structures can accommodate them.
close

Email a Friend

The state of blockchain in banking and finance

It’s said that blockchain will transform the nature of financial services, but how large institutions will integrate the technology is still an open question. It was the core topic of discussion among industry leaders from banks, financial services companies, venture capitalists and startups who met in New York at Tearsheet’s Bitcoin and Blockchain hot topic event Monday. Here are five things we learned:

Institutions need to take a long-term view for blockchain applications.
In thinking of future applications for the technology, the industry needs to think beyond what’s possible now and look beyond — much in the same way technology developers thought beyond the World Wide Web to streaming video and e-commerce. “The vision takes not a two to give year view but a 20 or 30-year view, and that’s the context of what this is about,” said Hadley Stern, senior vp of Fidelity Labs.

Banks need to consider the risks and opportunities of being first movers.
Participants debated the implications of pulling forward on technology that hasn’t been fully tested in a traditional financial services environment. “By and large, fintech firms have moved on [banks’] territory and banks have learned a lesson,” said Aite Group Senior Analyst Javier Paz. Some felt innovating too fast may draw the ire of regulators, while others saw it as an advantage in building the relationship with them.

Among incumbents, use cases have moved from from the front end (payments) to back-end transactions.
While the potential for blockchain-powered payments initially got a lot of attention, it was costly to implement. Incumbents are more closely exploring backend technologies like settlement and how assets are issued.

Human-based structures will have a critical role in implementation.
There is no clear winner among the enabling frameworks: “We have somebody who says you have to implement in Ethereum or Hyperledger or Corda — how are we going to measure the performance of these different blockchains or distributed ledger technologies?” asked BNP Paribas Blockchain Strategist Vipin Bharathan. Instead, a collaborative “sandbox” approach, bringing together parties from the business an tech worlds, is more likely to bring about scaleable solutions. Blockchain will also change the way digital identity will be managed, and banks will have to rethink how they collect and utilize data.

In marketing blockchain-based solutions, you need to be able to explain the value proposition to the client. The space for blockchain-based technologies will get increasingly crowded. Much has been said about its possibilities to make transactions more efficient and secure, but without a sales engine, technology providers can encounter roadblocks. KYC is not just for the regulators, but for the customers, too. Beyond the hype, technology developers need to be able to explain the benefit to the different types of consumers, including technical buyers and user buyers. A starting point is to understand the user problems that the technology is intended to solve. KYC is not just for the regulators, but for the customers, too.

 

 

 

 

 

 

 

0 comments on “The state of blockchain in banking and finance”

Blockchain and Crypto

Thinking through the impact of Elon Musk’s acquisition of Twitter on Dogecoin

  • Twitter accepted the terms of the deal with Musk, who has ideas how to better monetize the popular service.
  • Some think Musk would likely integrate crypto payments on Twitter in some way.
Sara Khairi | May 12, 2022
Blockchain and Crypto

Crypto-backed mortgages are here and more options are on the way

  • Crypto mortgages can be useful for those who are crypto-rich and cash-poor and have a lot of their wealth invested in cryptocurrency.
  • These types of loans are still very new and Bitcoin's fluctuating value makes crypto mortgages a risky option for homebuyers.
Sara Khairi | May 02, 2022
Blockchain and Crypto, Member Exclusive

Bankchain Briefing: ‘We’re thrilled to dispel the myth that crypto is just for men’ – SDF’s Denelle Dixon

  • This week, we examine research that shows the growing awareness, ownership, and use of crypto for cross-border payments.
  • We also look at the beta version of Coinbase’s long-awaited NFT marketplace.
Ismail Umar | April 28, 2022
Blockchain and Crypto

Bitcoin 2022 Miami: Has Bitcoin taken over the world yet?

  • Earlier this month, Miami hosted a major 4-day conference, Bitcoin 2022 -- spilling crypto and Bitcoin-focused insights.
  • While some people found the event productive, others reported that it was as much a social, networking-based event as one where people shared commercially actionable information.
Sara Khairi | April 20, 2022
Blockchain and Crypto, Member Exclusive

Bankchain Briefing: What Visa’s Creator Program says about its interest in NFTs

  • Visa has launched a Creator Program to help digital content creators navigate NFTs.
  • The firm has been quite active in blockchain and crypto-related initiatives over the past year.
Ismail Umar | April 14, 2022
More Articles