The concept of banking is slowly evolving, struggling to be simultaneous with the ever changing technological environment. Modern banking has adapted
The concept of banking is slowly evolving, struggling to be simultaneous with the ever changing technological environment. Modern banking has adapted the integration of blockchain technology regardless of what was thought of it several years ago. The greatest challenge is the incorporation and collaboration of these forms of technology and banking and how the users will be able to adapt to this new form of banking.
“The blockchain technology has exceeded people’s expectations as to how soon it will be successfully adopted by banks,” said a report from the American Banker, which looked at how far the blockchain has grown over the past two to three years.
Asset managers predicted the adoption of blockchain to take a minimum of five years and by 2021, the technology will have been integrated successfully into the banking system. As per now, 45 percent of 2,000 investors and 500 wealth firms have stated to be already exploring the technology and a further 64 percent are expected to expand on it within the next five years.
The technology implementation has been intensified as by 2016, blockchain prototypes had already been trialed and tested. According to an IBM study, banks should be putting blockchain solutions into implementation by 2017.
The integration can be seen through the completion of a pilot implementation of Ripples blockchain technology by a confederation of 47 Japanese banks to enable real-time domestic and international money transfers.
Nearly a month after South Korean first blockchain confederation, the South Korean Financial Services Commission (FSC) revealed its plans to launch a blockchain pilot project for financial services this year.
“South Korea has the world’s top-level ICT [and] it will be able to lead the international trend in the blockchain sector if the government, related industries and experts pool their wisdom,” said the FSC vice chairman Jeong Eun-bo.
Government Support for Permissioned Blockchain
IBM hosted a speech in New York last spring, urging the support for permissioned blockchains where industries and government agencies exploring the technology in networks will know each other.
The integration and collaboration still remain the key conundrum for banks while looking at the technology`s adoption.
Nearly half the audience from a Depository Trust and Clearing Corporation (DTCC) gathering said integration was the greatest hurdle, from a choice of data security, privacy, scalability, business case and integration. This was reported by the American Banker.
The chief business development officer at Digital Asset holdings Chris Church added that Interoperability is key: if you don’t look at obvious challenges, privacy and scalability are solved.If you do get interoperability, which requires collaboration, all sorts of things become possible.