La Fosse Associates held this panel event for Innovation and Technology leaders to discuss the impact and opportunity of Blockchain implementation and adoption within the Financial Services sector.
With blockchain beginning to gather steam in the enterprise world, businesses have been studying and experimenting with the technology to better understand the threats and possibilities that it presents.
So La Fosse Associates hosted the Blockchain in Financial Services event, held at Runway East, for senior IT decision makers – including blockchain devotees as well as its sceptics – to discuss the hype and reality of the technology.
Here are three key takeaways from the panel of Simon Taylor, Director of Blockchain at 11:FS; Travers Clarke-Walker, SVP, Sales and Marketing at Thought Machine; Peter Bidewell, CMO at Applied Blockchain; and Dan French, CEO at Consider Solutions; facilitated by Jonathan McKay, Chairman of La Fosse Associates, Forward Partners, JustGiving & CBNL.
Businesses care -- but consumers don't
London is among the frontrunners when it comes to the use of blockchain in financial services, with organisations in the capital having gone beyond exploring the concept and onto having a thorough understanding of the technology.
As an emerging technology, blockchain has attracted more than its fair share of hype, but that doesn't mean there isn't value-add there: as long as companies approach blockchain as one tech tool among many, rather than as a silver bullet, there are benefits to be had.
As for whether the use of blockchain affects the trust relationship between consumers and financial services organisations, the panel were clear: absolutely not. Consumers are only interested in the services that companies offer, not the technologies that underpin them. In much the same way that consumers use Amazon without ever wondering what IT the company uses as long as it keeps delivering its parcels on time, if financial services organisation can keep offering services users want, blockchain just won't be an issue.
The starter's gun gets fired in six months -- but the race lasts for 10 years
Currently, there are a handful of financial services organisations deploying blockchain in a very limited way, going live with low-volume projects. However, the next six months will see a more productive phase for the technology in the industry as it gets rolled out, in whole or in part, to address particular business problems.
However, it will take a matter of years before the technology becomes pervasive, as companies watch the first movers to see how their plans work out. The panel likened the state of blockchain today to the state of online bookstores in the mid 1990s: the opportunity is incredible. While there will be a lot of failures and a lot of pilots that get shelved, there's an industry-changing success to be had eventually. That success, according to the panel, could be around a decade away.
You can change the board -- or change your language
Given the scale of change that blockchain could represent in the financial services industry – as well as that ten-year timescale – some board members may be reluctant to adopt the technology, fearing the risk is too great.
One way of overcoming this friction point would be to include more technologists on the board, but given how many years the call for more senior IT personnel at the top table has been going out, that might not be the quickest way to accelerate blockchain adoption.
Instead, the panel suggested, changing the board is a matter of increasing their education – surrounding them with solid advisors and making sure they aren't miles away from the engineers that understand the technology. Changing the language around blockchain could also prove helpful to persuading the board of blockchain's merits. While cryptocurrencies may have given blockchain all sorts of associations, finding a new way to talk about the technology, and doing away with the jargon, can be useful when approaching the board.