The global business consulting and technology services provider Synechron conducted a survey in cooperation with capital markets research firm TABB Group on the topic of blockchain technology in financial services. Over 200 senior-level financial services and technology decision makers across the U.S., U.K. and Europe were interviewed for this survey. The outcome of the survey suggests that the vast majority of financial institutions believe in the potential of blockchain technology and that it will be in everyday use in the financial industry within the next 10 years.
Of the surveyed correspondents, 94 percent believe that boards have bought into the idea of developing blockchain technology projects, while 87 percent also believe that they have the budget to implement them. One of the biggest challenges for blockchain adoption in the financial industry that has been identified by the surveyed is the lack of human resources needed to implement large-scale blockchain projects. Of the senior-level financial services professionals surveyed, 70 percent believe that their institutions currently do not have the right talent to properly implement the distributed ledger technology.
Furthermore, the survey indicates that over two-thirds (67.4 percent) of financial institutions are currently involved in blockchain initiatives while close to one in five (16.7 percent) institutions have already identified use cases for the distributed ledger technology. Know Your Customer (KYC), trade finance and global payments are the most cited areas of implementation. And 15 percent stated that they have already developed blockchain pilot systems, while nearly one in four institutions are part of a working group to find blockchain-based business solutions.
Challenges for Blockchain Adoption in Financial Services
The perceived challenges for widespread blockchain adoption in financial services are focused on two key areas: regulatory requirements and technological limitations.
Almost one in four of the surveyed financial services professionals stated that they are waiting for clear regulatory guidance on distributed ledger technology before making business decisions regarding this technology.
The issue of interoperability among individual institutions’ blockchains was noted as a chief concern for 29.3 percent of the respondents; 20.9 percent had privacy concerns about using blockchains, and another 20.5 percent highlighted the issue of blockchain scalability as their number-one concern.
Synechron CEO Faisal Husain commented on the survey results, stating: “It is clear that many financial services firms are either seriously considering how to utilize blockchain [technology] within their organization or are already putting this technology into practice.”
He further added: “However, with any new technology there are challenges to be overcome. Our survey shows that recruiting the right people is one such challenge, regulation is another and technical considerations related to the technology itself another.”
Synechron’s survey clearly indicates that the financial industry has accepted that blockchains will play an integral role in its future. However, the survey has also highlighted that the technical challenges of blockchain implementation means that it will take several years before widespread adoption can take place.