First Published: Finance Monthly / June 2020
So why did blockchain adoption take so long compared to other new technologies such as cloud and AI? The slow adoption in highly regulated, complex markets such as the financial services industry shouldn’t come as a surprise. Blockchain is suited for complex, collaborative, multi-party, and critical application use-cases. This is another big reason why blockchain adoption has taken much longer than some predicted, as Rob Coole, VP of Cloud Technologies at IPC, explains below.
Next-generation blockchain organisations are leading the way showing how the technology can be used intelligently for the world we live in today. For example, R3, an enterprise software company, is working with an ecosystem of over 200 financial institutions, regulators, trade associations, professional services and technology companies to develop Corda, a Blockchain platform designed specifically for businesses to deliver two interoperable and fully compatible distributions of the platform that addresses issues such as transactional certainty, data privacy, and scalability limitations.
Gartner predicts that blockchain will be fully scalable by 2023. IPC’s sense of the future of blockchain, particularly in the enterprise space, is just as positive. We are seeing customers truly learning about the practical reasons to deploy, leading to more investment in time and money in blockchain.
Both application service providers and subscribers should partner with service and product providers at an operational level integration to be ahead in the blockchain curve. Real value is provided with the integration and support from the hyper-scale platform community such as Microsoft Azure and AWS together with open industry platforms, such as IPC’s Connexus Hub, that creates end-to-end solutions that solve business problems. The importance here is APIs. We believe in a API partner integration approach which gives institutions the ability to easily access data, provide insights and inspire innovation for the market need.
Service providers, like IPC, can play a critical role here by supporting operationalisation in the systems-oriented context. Such providers are a natural connector embedding connectivity to key market participants. IPC, for example, enables access to all asset classes with over 2,000 sell-side firms, 4,000 buy-side firm and 75+ exchanges in its vast, diverse ecosystem.
COVID-19 has provided a ‘new normal’ that is impacting every aspect of our lives. Though this pandemic is devastating from a health, societal and economic perspective, blockchain may help the global economy rebound. The World Economic Forum believes technology such as blockchain “will benefit all countries currently impacted by COVID-19”, as it provides an efficient approach to reduce trade cost on a global scale.
Digital initiatives such as blockchain is non-partisan and open to all which allows users to act quickly at low cost with low barriers for innovation – all valuable factors in supporting the economy in an economic downturn. So, although blockchain adoption was slow in its early stage, 2020 seems to be the year blockchain comes of age.