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Seven ways the financial industry can benefit from blockchain technology

Euroclear and Oliver Wyman have jointly published a white paper on the potential of blockchain technology and how it could be used and adopted.

Benefiting from blockchain

'Blockchain in capital markets: the prize and the journey' seeks to investigate the potential of distributed ledger technology and discard some of the hype. The paper suggests seven steps for the industry to take advantage of the blockchain technology:

  1. work on concrete proofs of concept;
  2. challenge service providers to innovate;
  3. understand current quantification of operational costs, isolating savings from blockchain;
  4. continue industry-wide engagement;
  5. participate in prototypes and embrace “learn by doing”;
  6. bring the business mind to technological start-ups;
  7. prepare the narrative for regulators and supervisory bodies.

Angus Scott, head of product strategy and innovation at Euroclear, a provider of post trade services to the financial industry, said: “In order to work together to shape a new future, the industry needs to take a collective view on the potential of the technology, which was the intention of this study. The market must embrace this potential, show patience with this development and invest in various innovative solutions to bring it to reality.”

Blockchain will bring savings

Most of the savings from blockchain could come from disposing of redundant or duplicative systems, as well as reduced operational overheads and cost-sharing across institutions. The technology could enable financial institutions to work in real time from common datasets. “The prize on offer is a world where all capital market participants work from common datasets, in near real time and where supporting operations are either streamlined or made redundant,” said Ben Shepherd, a partner at management consultancy firm Oliver Wyman.

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This item appears in the following sections:
Treasury Systems Connectivity
Dealing & Trading
Dealing & Trading Platforms
Financing Short-Medium Term Deficits
Best Practices & Benchmarking

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