As blockchain moves away from its bitcoin heritage it stands to revolutionise traditional banking models. However uncertainty remains surrounding the adoption of the technology, the role of crypto-currencies and recruiting the talent to drive this forward. Blockchain presents retail banking with both an unprecedented challenge and opportunity, ignore it at your peril!
- This is now a $trn market and cannot be ignored.
- The concept of blockchain as a technology will completely change the way we hold and interact with personal data. Cyrpto is the first application for blockchain, there will be many more!
Key issue and challenges
- The power required to conduct the calculations in Blockchain is prohibitive. Bitcoin Mining is using the same energy consumption as Switzerland!
- To adopt these technologies will require businesses to invest heavily in technology and may be prohibitive for those with old legacy systems.
- There is a talent shortage of those who understand and know how to use the tech.
- As consumers get a handle on the value of their data they will increasingly look to solutions such as Blockchain to control access. This will require a complete rethinking of many of our current business models.
- It’s not clear who the winners will be and what the ultimate technology will look like. So even though it has the potential to be incredibly business disruptive it’s difficult to set your strategy.
- It needs a big brand or currency to adopt the tech for it to become more mainstream e.g. could the Bank of England support a sterling version of a crypto currency?
Conclusions and solutions
- Blockchain is totally auditable and also very secure. For personal data storage this provides a massive opportunity to reduce administration and improve customer data control. For example the land registry data could all be held on a Blockchain and anyone looking at the data would be recorded as having done so. It would greatly reduce times for mortgage approvals etc.
- For consumers it offers the opportunity to keep all their personal data in one place and to authorize and have an audit trail of any business that looked or used the data.
- This will allow consumers to choose what they share and charge for access to their data.
- Reduces switching costs as all data is held by the customer and improves visibility of what people are doing with the data.
- For businesses it could completely change how we service customers.
- Crypto currencies will become more widely adopted when they are introduced by more mainstream banks and currencies. Actually because of the auditable nature of Blockchain the technology is more secure than many other ways of transacting.
- As some of the big National banks get behind the technology it will become mainstream.
- This may prove a challenge for organisations that have to adapt very quickly when the change occurs.
- There are currently over 1500 cryptocurrencies. The tech basis that finally wins in this space is probably not in existence today?