Blockchain is at an inflection point today with momentum shifting from the creation and exploration of the technology to the building of practical business applications. According to a recent report, 56 per cent of global enterprises plan to use blockchain by 2020 (opens in new tab).By leveraging the benefits that blockchain technology offers, thousands of businesses around the world might be able to solve the market inefficiencies they currently endure. Much like the monumental shift from paper to online, the uptake of blockchain technology by companies around the world will see a huge shift in the way many industries do business.
Financial institutions including HSBC, Standard Chartered, Bank of China, Deutsche Bank, Société Générale and UBS, amongst many others, are reportedly turning to blockchain technology to help speed up, simplify and reduce their risks associated with the $16 trillion global annual trade (opens in new tab). Banks hope the decentralised nature of the technology, which draws on and verifies information from thousands of different sources, will eliminate vast reams of paper documentation and unlock up to $2 billion in extra financing business within eight years (opens in new tab).
Blockchain technology can provide unprecedented opportunities that cannot be replicated over centralised platforms. It reduces operational costs, maximises efficiency and integrates regulatory compliance within the system.
The current regulatory landscape is built around a model of blame. With IT outages and cyber breaches, one person within every organisations holds all responsibility, and in turn, also all the blame. Blockchain technology can take this away from an individual to embed it within a distributed trust platform. Not only can compliance be embedded within the ledger, it can also provide unprecedented security to all transactions on the system. Every movement on the blockchain is recorded and unalterable, providing the much-needed trust and transparency advocated by regulators worldwide.
Despite this, 45 per cent of executives are still wary of the technology (opens in new tab) and have cited the lack of scalability, energy-consuming mechanisms and the operational risks of blockchain integration as the biggest deterrents to mass adoption.
Dave Locke, Chief Technology Advisor, World Wide Technology (opens in new tab)
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