Video: Financial Industry and Blockchain

The world continues to buzz about the significance of blockchain and cryptocurrencies, but reviews are still mixed in the financial industry. Will blockchain really create the disruption pundits predict?  

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What Does Blockchain Mean to the Financial Industry?

Jun 27, 2017

Video: Financial Industry and Blockchain

The world continues to buzz about the significance of blockchain and cryptocurrencies, but reviews are still mixed in the financial industry. Will blockchain really create the disruption pundits predict?

A consensus is emerging: yes, no and maybe – all at once.

In light of the early uncertainty, many financial institutions and other key industry players are walking the fine line between leaning too far forward by investing too soon and getting left behind by not being proactive enough. In short, they want to be on the "leading edge" but not the "bleeding edge" of this emerging technology.

Blockchain looks promising

"Cautiously optimistic" is a phrase heard around financial institutions in relation to the blockchain today. This is due to some promising new use cases showing greater efficiencies in a variety of processes including post-trade settlements, trading assets and exchanging options and other types of derivatives. Industry leaders are also hopeful as they explore potential capabilities and cost-savings with transactions in the global payments world.

Another common theme surrounds the opportunity to address social challenges with this technology, including providing credit histories and resources that would benefit people on all levels of the financial pyramid.

The emphasis on immutable, transparent and reliable transactions also makes the blockchain particularly appealing to financial institutions in terms of fraud protection. Fraudsters are no doubt investigating the technology for their own purposes, so industry experts are already exploring how to stay ahead of them.

Proof-of-concept projects will determine how much and how soon to invest in blockchain and cryptocurrencies. And while there may be some disagreement about the level of impact on the financial industry, there is little dispute about the fact that whatever change is coming won't happen overnight. So in the short term, the industry will wait – but the forward-thinking among it will investigate and prepare in the meantime.