Other parts of this series:
To get the maximum benefit from blockchain technology, a global, open network will be key.
In my last post, I talked about some of the findings of a recent survey commissioned by Accenture that sought to answer questions around the current state of blockchain adoption in the banking industry.
As expected, the survey results indicated that blockchain use is top of mind among banking executives who lead payments businesses. The survey also uncovered the major benefits executives expect blockchain to generate for their bank, the use cases to drive those outcomes, and where banks are currently focusing their efforts.
Regardless of progress, the most prevalent use cases banks are studying involve intra-bank cross-border transfer. By contrast, cross-border remittances, corporate payments, and inter-bank cross-border transfers are receiving comparatively less attention.
But wherever they hope to deploy blockchain, executives expect a wide range of benefits, including:
- Lower costs
- Quicker settlement
- Fewer errors and exceptions
- New revenue opportunities
To that end, and perhaps most critically, our survey also revealed what executives believe must happen for blockchain to gain prominence globally. A global network will be critical to helping banks use blockchain to help transform payments at scale and help reduce risk of failure.
The most effective network should have two defining characteristics:
- It should include the necessary defined rights, obligations, controls and standards.
- It should offer a quick and efficient onboarding process that enables banks to essentially “plug and play” into the network for both existing and future corridors.
Standards are seen as especially critical, as are openness of the network and ubiquity.
However, such a network is still in its infancy. Much work remains to define the rules of engagement and help create the basics of the network before banks can move past a discussion of the technology itself and begin exploring how to actually use it to improve their business. Some of this heavy lifting could be handled by a consortium, possibly owned not only by banks, but also technology companies and other players.
But regardless of who’s creating and driving the network, banks roundly agree that without a robust one, blockchain has little chance for success.
In my next post, I will review other keys to blockchain adoption and venture a peak down the promising road ahead.
To learn more, take a look at the Blockchain Technology: How Banks are Building a Real-Time Global Payment Network report.