So- you want to do blockchain, right?
Over the last few years the bell has been ringing for the ‘blockchain revolution’ without too much happening on a practical level for those working within financial institutions. It doesn’t take Nostradamus to know that, sooner or later, much of our tech will be focussed around blockchain applications. But when? For many, the closest they’ve got thus far to this hallowed new technology is buying some Bitcoin with their Ethereum holdings on Coinbase.
However, in recent months the wheels have started turning a whole heap more. Now, there is perhaps more widespread understanding of how the technology might be integrated into financial systems than the likely outcome of the Brexit deal (granted, I’ve set the benchmark very low here!). Maybe not though… Nevertheless, increasingly banks have been testing blockchain applications and are looking to be the pace setters amongst financial institutions.
No doubt the buy-side will follow, but what is likely to change within your firm?
It’s possible that, as developments start to gather pace, resourcing needs might well change to accommodate them. The need for new hires with a background in computer science could well increase. Vacancies for developers with other-worldly mathematical skills will be proving valuable for those looking to convey the more technical side of blockchain, to those incumbents within product teams. This doesn’t mean ‘Goodnight Vienna’ for those already in a job, as valuable knowledge exchange will be required. Their information on blockchain for your practical understanding of financial markets- deal!
Another potential outcome is that closer partnerships between firms will develop – as things currently stand, information exchange between counterparties often relies on firms operating on the same blockchain. Does this mean that bonds will form with companies you currently compete with though? It’s possible, as networks will rely on widespread uptake to be truly effective. Having two channels for processing transactions (one for adopters and another for non-adopters) already sounds both scary and risky. No doubt integrating blockchain solutions within legacy technology will be no mean feat, but this will be essential; the mere thought of which is likely to give your Chief Operating Officer a headache.
Whilst there are many unknowns, what is crystal clear is that blockchain development will not progress in isolation; developments in this space are likely to run in tandem to the leaps being taken in AI and Big Data.
All in all, this next increment of the technology revolution is particularly exciting (if not about 8% terrifying as well).
I’d love to hear from you though- what does blockchain mean for you and your firm?