ARMONK, N.Y., Sept. 28, 2016 /PRNewswire/
-- Commercial blockchain solutions are rapidly being
adopted throughout banking and financial markets, dramatically
faster than initially expected, finds two new IBM (NYSE: IBM)
studies. Fifteen percent of banks and 14 percent of financial
market institutions interviewed by IBM intend to implement
full-scale, commercial blockchain solutions in 2017. Mass adoption
isn't that far behind with roughly 65 percent of banks expecting to
have blockchain solutions in production in the next three
years.
The new IBM study, "Leading the Pack in Blockchain Banking:
Trailblazers Set the Pace (1)" is based on a survey
of 200 global banks. A second new IBM study, "Blockchain Rewires
Financial Markets: Trailblazers Take the Lead (2)," is based on a
survey of 200 global financial markets institutions.
Conducted by the IBM Institute for Business Value (IBV), the
banking study revealed that more than 70 percent of trailblazers
surveyed, or early adopters, are prioritizing blockchain efforts in
order to break down current barriers to creating new business
models and reaching new markets. These trailblazers are better
positioned to defend themselves against competitors, including
those untraditional disruptors like startup non-banks. For
financial markets institutions, seven out of 10 trailblazers
surveyed are focusing their blockchain efforts on four areas:
clearing and settlement, wholesale payments, equity and debt
issuance, and reference data.
"There are many advantages to being an early adopter of blockchain
technology," said Likhit Wagle,
Global Industry General Manager, IBM Banking and Financial Markets.
"To start, first movers are setting business standards and creating
new models that will be used by future adopters of blockchain
technology. We're also finding that these early adopters are better
able to anticipate disruption, fighting off new competitors along
the way."
Banking Trailblazers
Based upon the new IBM study, larger banks are defying industry
expectations and are leading the charge to embrace blockchain
technology with trailblazers being twice as likely to be large
institutions with more than a hundred thousand employees -- not
small start-ups or FinTech organizations. Additionally, 77 percent
of these larger banks are retail banking organizations.
Trailblazers expect the benefits from blockchain technology to
impact several business areas, including reference data (83
percent), retail payments (80 percent) and consumer lending (79
percent). When asked which blockchain-based new business models
could emerge, 80 percent of banks surveyed identified trade
finance, corporate lending and reference data as having the
greatest potential.
Keys to Success: Banking trailblazers view blockchains as a
means to create new business models and access new markets, yet,
outside of early adopters, banks feel there are many barriers to
success when adopting blockchain. According to those surveyed, the
top barriers to success include regulatory constraints (56
percent), immature technology (54 percent) and lack of clear return
on investment (52 percent).
To best extract value from blockchain technology, the IBM study
recommends that banks and financial markets institutions answer
three questions:
How fast should we move? Trailblazers are setting a fast
pace and they may also have an advantage. Mass adopters should look
to trailblazers for lessons learned but should be prepared to enter
the market as soon as possible, especially as early blockchain
initiatives can influence regulations moving forward.
How can we scale across business networks? Once blockchain
technology has scaled across multiple participants, they can
anticipate achieving the kind of network effects that can
drastically reduce the frictions that curb growth. Early blockchain
adopters are already working on the new business and technology
standards that will be required for scale. Mass adopters should
join them and begin building strong partnerships.
How can we innovate with new revenue models? As new entrants
and new business models emerge, banks may be forced to defend
current revenue streams or move to where the money will flow next.
New revenue models must anticipate the potential for disruption in
areas core to the business today and in the future. As the market
evolves, blockchain technology may add at least one new revenue
stream; the potential to monetize reference data looms large. Banks
should factor that into their thinking from the outset.
IBM is rapidly expanding its blockchain consulting services and
capabilities, and actively working with clients to understand what
it takes to make blockchain ready for business. Through its open
source contributions to the Hyperledger Fabric and its blockchain
services on IBM Bluemix, developers can develop applications easier
than anticipated while testing security, availability, and
performance of a permissioned blockchain network. IBM is advancing
the science of blockchain, helping to remove complexity, and making
it more accessible and open. Financial services, supply chains,
IoT, risk management, digital rights management and healthcare are
some of the areas that are poised for dramatic change using
blockchain networks.
To read the full study Blockchain Banking Industry
Perspective, visit ibm.biz/blockchainbank and the Blockchain
Financial Markets Industry Perspective can be found at
ibm.biz/blockchainfm.
To learn more about IBM Blockchain visit
www.ibm.com/blockchain.
Footnotes
(1) "Leading the Pack in Blockchain Banking:
Trailblazers Set the Pace," IBM Institute of Business Value (IBV),
September 2016,
ibm.biz/blockchainbank
(2) "Blockchain Rewires Financial Markets:
Trailblazers Take the Lead," IBM Institute of Business Value (IBV),
September 2016,
ibm.biz/blockchainfm
Contact:
Holli Haswell
IBM Media Relations
1-720-396-5485
hhaswell@us.ibm.com
Suzanne Aronowitz Cross
IBM Media Relations
1-617-693-1811
Suzanne.cross@us.ibm.com
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SOURCE IBM