So far, 2016 has been the year of advocating blockchain technology, as opposed to recent years when banks and other financial institutions have been skeptical of the technology’s worth. bobsguide spoke to ENTIQ’s Managing Director, Eric Van der Kleij and Technical Director, Tomasz Mloduchowski about the opportunities that blockchain presents and how customers have no choice but to trust now.
As a specialist innovation lab, ENTIQ aims to reimagine businesses and the implementation of blockchain is just one way that companies can move into the future, Eric and Tomasz explained. Alongside this, as the creator of UK government backed fintech organisation Innovate Finance, ENTIQ works in Level39, Canary Wharf, to accelerate and grow fintech companies.
After the financial crisis, fintechs gained popularity and now banks are thinking about whether they should compete or collaborate with the younger innovative players; at the same time, customers lost trust in their banks. Eric presented the idea that blockchain can remediate this issue as it provides secure transactions and “digital immutable trust”, and as regulations are put in place now, “the law is always there to mitigate trust”.
This attitude must apply to an industry that transacts and engages, which is why blockchain can be defined as “The Internet of Trust”. Tomasz explained how blockchain is synonymous to the Internet in more depth. “When the Internet was first used, it replaced smaller systems and internal processes. All these operations were connected which resulted in a larger structure, which is similar to how blockchain technology works.”
Tomasz continued to explain how it could be said that operations have reverted back to how things were done before, as customers can bank on their phone quickly and easily. This is why this form of technology has been modified and used in the products of many new fintechs in the payments industry, resulting in success, as shown by examples like TransferWise.
Going back to the question of trust, Eric said that having the backing of a branded bank would be enough for customers to trust blockchain technology. On the other hand, Tomasz suggested that even though “room for error is minimal” with blockchain, customers wouldn’t have a choice. Other than a traditional financial institution, customers would have to deal with a new challenger bank, who are mostly unknown and do not have a legacy behind them.
Blockchain implementation would allow for seamless banking experiences and like with all adoption of new tech, it poses the question of whether humans will be needed when systems can do their job for them. Eric found a silver lining in this predicament: “this is all part of the continuum of evolution and the smartest people will remain in the talent pool for the most innovative jobs”.
Eric and Tomasz explored how it is important for banks to work blockchain into their DNA and predict that the technology could be used by most customers in the 3-5 year range. This is the opposite of how blockchain was perceived for the majority of 2015, but now with the advocacy of the UK Government Chief Data Scientist, it is no longer the “money launderer's weapon of choice”, as Eric said.