PwC’s 2017 Global Digital IQ Survey says that 9 percent of financial services firms are substantially invested in blockchain. Research from Infosys Finacle and LTP concludes that the industry expects commercial blockchain adoption between 2018 and 2020, while Accenture predicts mainstreaming by 2025.
Although the technology is in its nascent stage, in 2018 we expect banks and financial institutions to adopt blockchain in a variety of use cases given its promising prospects.
In 2017, we saw banks and financial institutions cultivating ecosystems and experimenting with the technology in a multitude of pilot projects. In 2018, a number of new ecosystems will emerge and the existing ecosystems will mature and become richly diverse. These ecosystems will go beyond bank-and-bank partnerships to large networks comprising financial and non-financial entities, such as suppliers, regulators, trade associations, entities that are closely associated with banks, such as clearing and settlement houses and brokerages, and shipping and logistics companies. An IDC study predicts that by 2020, 20 percent of trade finance globally will incorporate blockchain/distributed ledger technology. As ecosystems expand and more and more members are added to the networks, these ecosystems will be extended to a variety of new use cases. For example, an ecosystem such as Finacle Trade Connect, originally set up to carry trade finance transactions, documentary credit etc., could well support syndicated lending or sector-specific commercial banking services in the future.
The second key development will be the shift in regulatory approach towards blockchain. We are witnessing interest from quasi-regulatory entities such as IDRBT (Institute for Development & Research in Banking Technology) and Lanka Clear networks that we have helped establish. Globally, regulators from the Bank of England to the Monetary Authority of Singapore and the Hong Kong Monetary Authority, are evolving standards to help their banks join and benefit from these ecosystems.
While most of the action in the space so far was driven by large and progressive banks, in 2018, leaders, early adopters and fast followers alike will participate in blockchain ecosystems making them more scalable and diverse. And with the necessary push from regulators, blockchain is set to become serious business in 2018.
Read the full report here – #ReimagineBanking – 10 Strategic and Technology Trends to Watch Out for in 2018
