Communications Director of Exante Patrick J O Brien talks about the blockchain revolution and the future of banks and financial services adopting this revolutionary technology in aid of reducing costs and improving security. The company Exante and its directors have been hailed by Forbes as being at the forefront of blockchain technology.
Below is a written report from Patrick J O Brien on the blockchain technology and its future:
Blockchain is undoubtedly one of the most talked-about technologies in financial services today. For anyone who’s been following innovation in the financial technology space, the word blockchain is the buzzword du jour. Tech analysts are consumed with the underlying ledger technology that powers Bitcoin as nearly every major bank in the world is in the process of testing or implementing this technology to help reduce their costs and improve security. Blockchain, in theory, is a web-based transaction processing and settlement system whose efficiency banks say could slash costs. It creates a “golden record” of any given set of data that is automatically replicated for all parties in a secure network, eliminating any need for third-party verification. It’s estimated that over 1 billion Euros has been invested in blockchain start-ups since the technology was introduced.
While expert opinion varies as to the way in which blockchain will impact financial services and to the extent to which it will disrupt the existing ecosystem, there is widespread consent that the technology has powerful potential to herald a new age of efficiency in the industry.
This year it is estimated, 15 percent of banks will have blockchains in commercial production. These pioneers are prioritising blockchain efforts to break through barriers to creating new business models and reaching new markets. They are also prioritising blockchains to benefit time, cost and risk in three areas: reference data, retail payments and consumer lending. They also expect blockchains to yield the greatest effect in opening up new business models in three areas: trade finance, corporate lending and reference data. Pioneers see a significant wall of disruption heading their way in core business areas.
Business opportunities enabled by blockchain technology are not dissimilar in concept from other disruptive technologies built on the peer-to-peer model, such as Uber and Airbnb. And that’s where things start to get really interesting for blockchain. Like these other types of peer-to-peer applications, blockchain has the power to significantly disrupt the status quo by removing administrative layers from the banking and finance process, ultimately streamlining labour and cost intensive functions across a wide array of financial services. While we’ve yet to really see the first real Uber or Airbnb of blockchain emerge, there are dozens of different firms working to develop solutions based on the technology. Imagine what will be possible when they get the recipe right.
As with all big economic and technological transformations, those nations that adapt first and fastest are the ones that will find themselves at the centre of new, emerging economic ecosystems. Malta’s Ministry for Education and Employment (MEDE) is working with Learning Machine Group (LMG) to put University degrees and earned credentials on the Bitcoin blockchain using the Blockcerts open standard whilst The Malta Stock Exchange has formed an internal ‘Blockchain Committee’ to guide the development of a strategic roadmap for testing the tech.