We know we can use blockchain within banking to offer increases in efficiency and security whilst simultaneously reducing costs, meaning it’s potential is massive, but what do we really know about the technology and can we trust it yet?
Finance professionals overall are either intrigued by the potential of blockchain or against it over fears that it poses more of a threat than a solution, especially in the realms of security.
With the general lack of knowledge on the subject, it seems only few have an insight into the future potential of this technology and how exactly it can be fully utilised in certain sectors.
It is similar to the arrival of the internet in the 1970’s, when there were a group of people regarded as “in the know” who realised that it had great potential and were sure that it was going to be huge in the future, they just didn’t know how.
However, even in these early stages, very few people are actively ignoring blockchain.
Our own research has shown that 87% of CFO’s are looking into blockchain in some way, such as the automation of processing of payments.
This is a positive response, showing a willingness to explore or improve upon existing protocols with the addition of new technology.
However, 36% admit they don’t understand enough about it to act just yet.
For the larger financial institutions and banks of today, blockchain is often described as more of a challenge than a potential opportunity, as its widespread use could render banks obsolete in the facilitation of secure document transfers.
This would cause a revenue loss so many banks, and even legal firms, would be left looking for new revenue streams to offset this loss of income.
There is evidence that some of the larger banks are collaborating on blockchain applications, but on the whole they are adopting a ‘wait and see’ approach to its development.
At Onguard, we are certain that blockchain will be a very important development in areas such as smart contracts and predictive analytics.
The potential for removing the transactional element of a deal in favour of a simple exchange across distributed general ledgers has great promise.
We also believe that blockchain could have an interesting impact on the order-to-cash market.
Yet before any of this, we first need to ascertain how secure it is and whether it can be trusted in the same way we currently trust the banks. In addition, do we understand the legislation and laws around it?
The consensus is that there are still several known obstacles to overcome, and possibly more unknown issues, before the blockchain vision becomes business reality.
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, so it is no wonder that 62% of businesses we polled currently have open vacancies for blockchain experts.
We advise seeking expert guidance from 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.
* Onguard provides order to cash solutions and credit management solutions to users in more than 50 countries. Download their blockchain whitepaper here.