Fintech makes the world go around

Nov 6 2017   10:18AM GMT

Blockchain is not the messiah, it’s a very practical and unexciting technology

KarlFl40 Profile: KarlFl40

Tags:

Even parents at the morning drop-off are talking about blockchain, but for banks it is really not that exciting.

I was really surprised to end up talking about blockchain with another parent when dropping the kids off at school. The said parent was neither IT journalist, IT professional or financial services worker. If it gets to the school drop off it is in the mainstream.

But blockchain was something he wanted to talk about.

And why not? The technology is being used in all kinds of businesses and government departments in many places. Like cloud a few years ago most large organisations have a blockchain story to tell. Perhaps I see more than most as PRs force blockchain angles into every press release possible, because it’s the latest buzzword.

So blockchain excites the world but is just another part of the engine for banks. In fact according to the latest Gartner research blockchain was only 20th most important differentiator technology, according to the financial services CIOs.

This is probably why banks are working together on blockchain using the consortium model or are buying from fintech suppliers. They can all benefit from it by cutting costs and improving security for example but it is not going to have hordes of Millennials knocking at your door for your service. In contrast digital transformation was seen as the most important differentiator, partly because millennials love it.

Blockchain has its roots in financial services as the technology that underpins Bitcoin so it might surprise some that financial services CIOs don’t really see it as much of a differentiator. That does not mean they aren’t spending on it. According to research from recruitment firm Robert Half Financial Services the take up of blockchain technology at financial services firms has in fact reached a stage where 96% of business leaders have invested in blockchain, plan to invest in it or realise they should be.

But like cloud computing blockchain is really making a difference in all kinds of business and public sector settings.

Here are some examples:

-The London Stock Exchange is currently testing out IBM’s blockchain technology in a platform to help small and medium-sized enterprises become more transparent so they can attract more investment.

-Food industry giants including Nestlé, Unilever and Walmart are working with the supplier to apply the technology to the global food supply chain in an attempt to improve food safety. The diversity of its application will inevitably lead to more experimentation.

-Maersk and IBM are working on the application of blockchain technology to track and manage the paper trail of shipping containers around the world.

-Food industry giants including Nestlé, Unilever and Walmart are working with the supplier to apply the technology to the global food supply chain in an attempt to improve food safety. The diversity of its application will inevitably lead to more experimentation.

-The National Bank of Abu Dhabi is to use blockchain-based technology to offer cross-border payments service to its customers.

-Swedish land registry is trying out blockchain as a means of proving ownership

Confused? If you want a description of what Blockchain is to make your own decision about how exciting it is, here is one in the words of Nic Carey co-founder of a company called Blockchain. I wouldn’t recommend reciting this at school pick up if you want the other parents to continue talking to you.

“Blockchain is a peer-to-peer network that allows multiple parties to transfer value in a secure and transparent way. The technology allows us to create a system in which: no one can corrupt, sabotage or control the system; trust between participants is not necessary because it is embedded in the system itself; access to all relevant information is available to participants; and activity in the system is held to account through transparency.

The record of transactions on a blockchain is immutable, which means once a transaction is added, it cannot be altered or deleted. Moreover, the blockchain is maintained and validated by everyone who uses it, thus eliminating the need to trust a single central administrator. These features guarantee the integrity of the system. With a few thousand lines of code, users can download apps on their phones that allow them to effortlessly make transactions with anyone else, as easily as sending an email.”

2  Comments on this Post

 
There was an error processing your information. Please try again later.
Thanks. We'll let you know when a new response is added.
Send me notifications when other members comment.
  • expathos
    Unexciting? What the incumbents are doing with it maybe yes... but you need to explore what the startups are doing with concepts and ideas around Blockchain. 
    0 pointsBadges:
    report
  • KarlFl40
    I would love to hear about them and get them in this blog. Email me on kflinders@techtarget.com
    28,510 pointsBadges:
    report

Forgot Password

No problem! Submit your e-mail address below. We'll send you an e-mail containing your password.

Your password has been sent to:

Share this item with your network: