CIO , Data
We have heard about it for a very long time, and now, the financial services are taking blockchain to the next level. Currently, the industry spends about $1.7 billion annually on the distributed ledgers that are best known for being the base of digital currencies.
The budgets that have been spent on blockchain increased more than 50 percent last year, with statistics showing that 1 in 10 banks and other firms are spending in excess of $10 million on blockchain technology. Complimenting these statistics, the number of employees working on blockchain initiatives doubled last year, demonstrating that finance is taking the technology more seriously in business operations.
Blockchain Innovation in Financial Services
So, what does this increase in spending mean for the financial services? There are benefits of finance taking the plunge into the world of blockchain, since the potentiality for it to serve the industry appears to be limitless and ultimately have a solution for numerous problems the financial and banking sectors encounter regularly.
“Billions of individuals and businesses are served and trillions of dollars are moved around the antiquated global financial system each day. Still heavily reliant on paper, albeit dressed up with a digital façade, there are many issues with this system that cause added expense and delays as well as make it easier for crime and fraud to cripple it. Despite the financial industry’s resistance to change, blockchain and its expected benefits make it worthwhile.” – Forbes reports.
Even though blockchain is still a relatively new technology, it is transforming finance and banking as we know it. For example, blockchain is paving the way for innovation in the financial services because of its potential to reduce fraud. In the financial world, this is getting a lot of attention since most financial intermediaries such as stock exchanges and money transfer services suffer from economic crime every year. With cost reduction emerging as the biggest driver of blockchain investment and development for financial service firms, implementing blockchain technology into business strategy is getting easier and easier for institutions across North America.
Overcoming the Hurdles of Blockchain in Finance
Before the finance industry, or any industry, can realize all the extraordinary opportunities blockchain technology offers in the banking and financial services landscapes, there are still hurdles that need to be overcome.
“Before blockchain can change the world of financial services – from remittance, trade finance, securities trading and insurance – it will have to overcome six key challenges: Complexity and scale, regulation, interoperability, resources, culture, and lock-in.” – CTMfile reports.
The blockchains that would be used by financial institutions would need to comply with privacy laws of today and the future and need to ensure the safety of the data it collects when implemented. There are still many questions regarding regulatory oversight for this new technology that needs to be sorted out before banks and other firms successfully deploy it. With the typical top-tier bank now having around 15 full-time employees working on the technology, any form of blockchain used in this sector would need to handle an extraordinarily large data set, therefore scalability is important in overcoming hurdles preventing successful deployment.
ABOUT TRANSFORMATIONAL FSI ASSEMBLY
C-level IT leaders in the financial services and insurance sectors are dealing with many challenges as digital transformation becomes an imperative. Understanding not only the convergence of Mobile, Social, and Cloud but also the possible implications of Artificial Intelligence, Machine Learning and Blockchain is vital to stay ahead of the competition.
Join us at FSI Transformation Assembly in November for updates on the latest digital technologies and strategies.
This is not just another “Financial Services” event. Spaces are reserved for the best in the business. Apply to attend here!
Jenny Schecher is a Client Services Director & Social Media Manager at The Millennium Alliance. Jenny is an avid contributor to our blog, Digital Diary, as well as all social media platforms. When she is not writing about digital transformation and technology, she is working with her team to make visions come to life at our events. (and eating all of NYC's best food.) Follow her on Instagram: @jennyschecs or find her on LinkedIn!
Reach thousands of C-Level
Executives every month.
Do you have content that you feel will
resonate with our audience? We'd love to
welcome you as a guest contributor!
Premium content to our readers
interested in all things business.
Millennium Membership offers Fortune 1000 C-Level executives, leading public sector/government officials, and thought leaders across a variety of disciplines unique and exclusive opportunities to meet their peers, understand industry developments, and receive introductions to new technology and service advancements to help grow their career and overall company value.About Millenium Alliance
Launched in 2017, Digital Diary was created to provide premium content to our members interested in executive education and business transformation. With C-Suite executive and top academic contributors, interviews with industry leaders, and digital transformation insights from technology experts, Digital Diary has all of the professional development tools you need to stay ahead of the curve.
We are dedicated to distributing meaningful opportunities for our reader to increase their personal knowledge, simplify business initiatives, and to have the right information to build their capabilities and leadership skills at every level.
In the midst of disruption across all industries, our members are given the tools they need to digitally transform their organizations.
Joining Mill All is an opportunity unlike any other to connect with the best professionals in your industry and be a part of a community to become the best leader you can be.
500 Companies Attend Each Year