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Banking

Blockchain shifts from theory to practice

Pilot projects to transact on distributed ledgers are starting to deliver lower costs, higher speeds and improved efficiency to bank customers. Blockchain may be the biggest shake up in market share the banking business has ever seen

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In February, Infosys Finacle and Let’s Talk Payments released a joint study on the use of blockchain by 75 banks, ranging from smaller regional players to large international financial institutions. It found that half of them have already invested in blockchain or will do this year and that one third expect to see commercial adoption of blockchain before 2018. Fully 50% expect to see that by 2020.

The true innovators account for no more than 15% of banks surveyed. These have already started full-scale blockchain initiatives, either through dedicated in-house support teams or through partnerships with technology startups or bigger IT companies. These leading banks have already invested $10 million or more each in blockchain pilot projects and intend to increase that this year.

But half the banks surveyed are likely to delay investment until the technology is more mature. They still worry about its scalability and resiliency, and harbour questions over the governance of the collaborative networks needed to deploy it effectively.

A gap seems to be opening up between the early movers and the moderately paced followers in banking on blockchain.

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