A Delayed Blockchain Strategy Can Sink an Institution
The sooner you and your organization can understand the potential impact, risk, and uses for blockchain, the better your chances will be of keeping your head above water.
The smartest organizations are already putting teams in place to mitigate risk and harness the power of digital transformation. Blockchain, the technology that powers Bitcoin, has the potential to completely change the way we use, depend on, and gather data in customer transactions – whether it be personal information, details of assets, or even real-time data from virtual currencies.
The blockchain iceberg may not be directly in front of us at the moment, but unless the culture of complacency is tackled head-on, financial services retailers will quickly find themselves in a precarious situation. By preparing properly and bracing for impact, organizations can learn the best way to steer themselves clear of danger, instead of facing a titanic struggle to stay afloat.
A blockchain can securely record ownership and any other information about any asset, and with its ability to enable transactions to be completed within minutes or even seconds, it could completely revolutionize the industry. While some suggest it will be a force for good, others suggest that the changes it would impose on the way these organizations operate will leave a trail of ruin in their wake.
Either way, one thing seems certain: the potentially huge blockchain iceberg lying on the financial services industry horizon requires careful navigation to avoid a massive collision. A recent global survey found that nearly two-thirds of the global financial services retailers surveyed thought it would prove to be the most significant technological development since the internet. Meanwhile, almost half said that the combination of blockchain wallets and Peer-to-Peer lending could herald the “end of banking as we know it.”
While yes, a majority of those surveyed had some understanding of blockchain, some financial services retailers still don’t know what blockchain is, or aren’t aware of the threat it poses. Thirty-five percent admitted they have never heard of blockchain, while of those who had, nearly a quarter said they had no understanding of the technology.
It’s difficult to reconcile these two sets of statistics. On the one hand, a significant percentage of financial services retailers acknowledge there is a new, emerging technology on its way that could have far-reaching consequences for the industry as a whole. On the other, we find a different set saying they have either never heard of the technology, or have no idea how it works. It’s the latter group that seems most troubling, as it’s never too early to start investigating the source of potential disruption.
Graham Lloyd is industry principal of financial services for Pegasystems