Firstly what exactly is ‘Blockchain”?
Blockchain is a system of recording information in a way that makes it difficult to change, hack, or cheat the system. A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain, as a chain of information blocks, for example a Bitcoin Block will contain information about the Sender, the Receiver and number of Bitcoins to be transferred.
Blockchain has been taken up by all types of Cryptocurrencies to make use of this distributed ledger technology, and has the potential to grow to be the bedrock of the worldwide record-keeping systems, facilitating faster payments at reduced costs.
Is it time for Blockchain to transform the financial services industry?
Firstly Blockchain is not a cure-all for the Financial Services sector, however there are clearly many problem areas for which this technology is the ideal solutions. Many major banks have already adopted or are in the process of adopting blockchain, including the likes of Goldman Sachs, HSBC, Barclays, RBC & JPMorgan.
We fully expect to see Blockchain technology to be the catalyst for change in sectors of the financial services market. We are already seeing companies look at what blockchain can bring to clearing, settlement and other intermediated functions; an area to watch is Trade Finance with its high volume, costly and time-consuming activity. Already we see Financial houses and shipping fleets using blockchain to create smart contracts between parties.