Banks experiment with Blockchain but widespread adoption at least six years away
New research from SIX Securities Services reveals that over three quarters of financial organisations are experimenting with Blockchain though many fear there is ‘no real solution yet’
- Over three quarters are experimenting with Blockchain (76%)
- 1 in 5 are piloting a specific service (18%)
- Settlement and clearing identified as areas where technology will have greatest impact
- Regulation will be the biggest barrier to adoption, followed by a lack of skills
London / Geneva 29 September 2016: Research commissioned by SIX Securities Services, has revealed that over three quarters of banks are experimenting with Blockchain technologies (76%) but believe a real solution is many years away.
Respondents point to regulatory uncertainty and a lack of in-house expertise as the major barriers to adoption – leading to an average estimate of six years before Blockchain is widely implemented.
The study reveals different approaches to innovation. 32% have developed a proof of concept, while 1 in 5 (18%) are piloting a specific product or service. 14% of total respondents say they have set up a Blockchain focused innovation lab, while 12% have partnered with a Blockchain company.
Respondents believe that Blockchain will have the biggest impact on settlement (38%), followed by clearing (34%). However, just 20% agree that the technology will make the clearing process completely redundant.
Regulation emerges as the primary perceived barrier, particularly for global systemically important banks – 72% highlight this as one of the top three factors holding Blockchain back from being adopted in clearing and settlement today.
Thomas Zeeb, CEO of SIX Securities Services comments “A lot of the conversations we are seeing around Blockchain are on the technical level, looking at what is feasible with Blockchain rather than what is desirable from a business standpoint. Blockchain has the potential to make a number of business models and intermediaries obsolete, which isn’t necessarily a bad thing. It is however important to question the changes that this would bring to the ecosystem. Until the industry has clear indications on sustainable use cases – including costs and benefits – it will be difficult to convince top managers to bring their trusted systems into these new domains.”
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SIX Securities Services
SIX Securities Services is one of Europe’s best performing post-trade service providers. SIX Securities Services offers comprehensive clearing, settlement, custody, collateral management and repo trading services for Switzerland and for clients in 65 markets around the world. In addition, as a key part of the Swiss Financial Market infrastructure, SIX Securities Services operates the platform for the electronic processing of land registration and mortgage transactions, the trading platform for the money market transactions of the Swiss National Bank and the platform for the settlement of interbank payments. Furthermore, SIX Securities Services offers fiduciary management of registered mortgage notes, as well as e-bills and direct debits.
SIX operates the infrastructure underpinning the Swiss financial sector and offers a comprehensive range of services around the world in the fields of securities trading and settlement, financial information and payment transactions. The company is owned by its users (approximately 140 banks of various orientation and size). Its workforce of over 4,000 employees and presence in 25 countries throughout the world generated operating income of CHF 1.8 billion and a Group net profit of CHF 713.7 million in 2015.