As we move further into a year which has been predicted to be the year of the fintech enabler, blockchain technology has emerged as the enabler for financial institutions to help them move into the digital space. bobsguide spoke to Angus Champion de Crespigny, who leads blockchain strategy for Americas Financial Services at Ernst and Young, about this and how the changes in the market will result in new products and services.
Is blockchain good or bad tech?
Technology cannot be good or bad. Technology is technology and how you use it defines whether it is good or bad. Technology can do bad things, but that is just a bad application, or used by bad people. In my opinion, blockchain is a technology that can be used either way.
How is blockchain being experimented with?
In the US, a lot of companies are examining the potential applications for this technology, especially in the banking and capital markets sectors. We’re seeing interesting trials like loyalty points and trade finance, or other applications for streamlining certain intercompany operations. People are assessing blockchain technology against their current business models to determine where it fits in; however it’s best instead to ask yourself in a world in which blockchain is ubiquitous, where value can move as easily as data, what would your business, products and services look like? As some have already started to ask this question, we are already starting to see some very interesting experiments.
When will we see full implementation of blockchain?
Much like the Internet it’s hard to say when it will be fully evolved, if ever, and it’s very difficult to say when you’ll reach a critical mass but it will be sooner than people expect. Blockchain has the ability to enable brand new products and services such as machine to machine payments, autonomous markets, and other applications that we haven’t even thought of yet. In the next two years, we will see some interesting applications developing.
Is blockchain the next big thing?
Everything is evolving, and blockchain could be the next big thing as it is the logical extension following the steps that Internet, social media and mobile took. We are at the beginning of that process with blockchain technology at the moment, and there is a long way to go in order to fully integrate finance, but there is a lot of promise there.
Do people still hate bitcoin?
There has always been a lot of excitement around cryptocurrency. Now, the phrase “I like blockchain technology but not bitcoin” has been common within the financial services industry of late. However, I think it’s too early to rule out bitcoin, as the technology provides a global, secure environment with embedded trust and that is very powerful. Rather than necessarily as a currency alternative, Bitcoin should be seen as the fuel that is used to run the network where data can be exchanged.
What predictions do you have for blockchain?
At the moment, we may be at the peak of the blockchain hype cycle. This technology has the potential to reshape how finance works; at the moment, we have an industry that is built on a lot of regulation and requirements, and there is logic behind this, but it does mean that finance is somewhat centralised. Financial institutions are looking at how they can do what they are currently doing, but on a different technology. Things will really get exciting when companies build new business and operating models or entirely new structures, fundamentally changing how finance works.