News

Study evaluates potential of blockchain for financial services providers

March 3, 2017

Corporate Insight, a research and consulting firm serving financial services providers, has published a study examining the current state of blockchain in financial services and its potential impact on the industry, according to a press release.

"Blockchain Solutions and the Future of Finance" identifies major trends in blockchain implementation; profiles organizations creating blockchain solutions for financial services; and highlights potential blockchain use cases — including loyalty programs, capital markets, real estate transactions, know your customer compliance, digital identity management, cross-border payments, and the commodities market.

For the study, researchers interviewed representatives from 14 key organizations, as well as leaders in the blockchain space. Their findings:

• 9 out of 14 blockchain vendors plan to bring blockchain solutions into production between now and early 2018;
• blockchain technology can present unique challenges for FIs. For example, if a person mistakenly purchases a large quantity of securities, the immutability of a blockchain would make it difficult to fix the error. Blockchain providers are developing solutions for these and other industry-specific issues; and
• companies are finding non-financial use cases. For example, BlockCypher has partnered with ShoCard, a blockchain startup developing digital identity solutions, and the Department of Homeland Security to help solve identity management challenges and enhance cybersecurity. This could help to alleviate onerous aspects of know your customer compliance.

"In the past two years, financial services firms and technology providers have made significant strides in turning the hype around blockchain into reality," Jennifer Butler, an analyst at Corporate Insight, said in the release. "Financial services firms are investing in blockchain to assess its potential for reducing operational inefficiencies and increasing market transparency. While the near-term industry impact of blockchain will be evolutionary rather than revolutionary, we expect these investments to continue and for blockchain-driven change to occur incrementally over the next few years."