Blockchain is hot, but where’s the beef?

In spite of the hype—news of blockchain developments and its associated Bitcoin currency has become nearly ubiquitous—large-scale enterprises have been slow to adopt the emerging technology that promises to disrupt and improve a wide range of industries from finance & banking, insurance and real estate to cybersecurity and even music.

Companies have played with it; they understand what blockchain does and how it works. Their innovation labs have participated in proof of concepts (POCs) and may belong to one or more industry consortiums created to vet the technology, but they haven’t taken the next step and implemented the technology for any mission critical apps.

Lost in translation: Smart contracts for financial services

The concept of smart contracts is simple; clauses and rules are embedded in software which is distributed via networks to provide an interface which formalises a transaction. Bitcoin has a distributed ledger a distributed consensus mechanism, and a distributed set of business rules and conditions. The contract for Bitcoin is relatively simple: ‘are the parties who they purport to be’, ‘do they have permission to buy/sell’ and ‘does the buyer have funds’. This is a straightforward smart contract which is actioned and then fulfilled for every buy or sell on the Bitcoin network.

The idea of a smart contract is very powerful; putting your trust in a set of rules and a shared consensus mechanism rather than any one party seems, on the face of it, an ideal solution. In finance we already trust in rules and triggers such as ‘stop loss orders’ and ‘buy triggers’ for share trading. This kind of trigger is relatively simple but still this transaction has its fair share of intermediaries and parties. For a wealth product, where I may be buying units in a fund which will trigger purchases in multiple markets and assets there are many more intermediaries and contracts. This increasing level of complex relationships and parties means that the contracts and rules must also be more complex and brings me to my concern in developing even medium complexity smart contracts with high levels of automation.

Iceberg ahead! How to steer clear of blockchain disaster

It’s funny how often even the most well-established organisations can underestimate the impact of potential change. Misjudging the effect of a potentially seismic event can prove problematic at best, and disastrous at worst in any industry. 

And yet, somewhat paradoxically, for such traditionally risk-averse institutions, financial services retailers are finding themselves in exactly this position, when it comes to their approach to what could be the most significant disruptor in financial services history over the next few years - blockchain.

Pulling for Blockchain

Capital markets firms will stop thinking blockchain is something to be suspicious of and start to realise its enormous possibilities this year. Blockchain will soon evolve into “the” disruptive technology that will totally transform the banking system, eliminating the need for securities depositories and central clearing, and reducing settlements delays.

Goldman Sachs jumped in late in 2015 by making a patent application for a cryptocurrency settlement system, called SETLcoin, which it reckons will offer, “nearly instantaneous execution and settlement” of trades including stocks and bonds. This decentralised, cryptography-based solution cuts out the middle man. It has the potential to redefine transactions and the back office of a multitude of different industries.”

2015 in review: the year that fintech hit form

What a difference 12 months can make. Industry conversations at 2014’s Mobey Day (Mobey Forum’s annual open conference for all mobile money stakeholders) told of an industry undergoing major disruption. Just 12 months later toward the end of 2015, the industry vibe had changed almost beyond recognition, particularly in the mobile payments arena.  Consternation, hesitancy and all-out frustration had given way to optimism. Last year’s disruptions have become this year’s tools of liberation, enabling banks, finally, to make progress.

Untangling the blockchain: A real game changer

The hype around blockchain is growing rapidly. The question is whether such hype is justified – will blockchain technology revolutionise the financial world?

This question has been on my mind ahead of this week's European Payments Council (EPC) General Assembly Meeting, at which I shall be presenting on the topic.

(Survey) Blockin' all over the world: Is Blockchain all it's cracked up to be?

Blockchain focused start-ups are springing up like mushrooms after the rain, and the big banks all seem to be investing in this space. But is this just a ‘fashion craze’ (loom bands, anyone?) and the big guys just want to show that they are technologically advanced and forward-looking, whilst the new guys want to cash in quick before the world moves on to the next big thing?

EuroFinance 2015 in Copenhagen: Witness the treasury fitness

Denmark and Copenhagen are two European locations that have polled as the happiest and healthiest in the world. What better place, the organisers of EuroFinance must have thought, to host a conference on ensuring that the treasury industry remains happy, healthy and fit for purpose? Health and exercise parables were abundant in Copenhagen, where delegates were encouraged to give their company strategy a check-up.

Blockchain to replace Swift?

It is interesting to compare the agendas of current annual events with those of one year earlier. For instance, in April 2014, Swift’s London Business Forum had no mention of bitcoin or blockchain. Roll forward one year and it was standing room only for its ‘What is the Future of Money?’ session with speakers from an array of companies that probably no one had heard of twelve months earlier (in part because some of them weren’t around then): Coinstructors, NXT 2 Pay, Innovate Finance, COLU and Epiphyte.